AND 

INDUSTRIAL 
HISTORY 


THURSTON 


iltll 


fjiii 


P^ 


'W'v 


ill 


llillH 


I  until  lillill!. 


s... 


■■  ^■ 


t.M^'-.A^^ 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


ECONOMICS 


INDUSTRIAL    HISTORY 


FOR 


SECONDAKY  SCHOOLS 


BY 


HENRY     W.    THURSTON 

HBAD  OV   THK   DKPABTMENT  OF  SOCIAL  AND  ECONOMIC  SCIKNCK   IN   THE  CHICAGO 
NORMAL   SCHOOL 


CHICAGO 

SCOTT,  FORESMAN  AND  COMPANY 

1902 


Copyright  1899 
By  SCOTT,  FORESMAN  AND  COMPANY 


ROBT,  O.  LAW  CO.,  PRlNTtRS  AND  eiNOEHS,  CHICAGO 


Wfi 


TO    THE 

MEMBERS    OF   MT    CLASSES    IN    ECONOMICS 

IN    THE 

HYDE    PARK    HIGH    SCHOOL, 

WHOSE    EARNEST   AND    LONG-SUFFERING    COOPERATION 

HAS    MADE    POSSIBLE 

THE    EVOLUTION    OF   THIS    BOOK. 


x^ 


Oo-  ^'  iC*<^Z 


PREFACE 


For  the  last  five  yeara,  the  author  has  earnestly  believed  that 
a  beginner  in  economics  had  a  right  to  find  the  subject  closely 
related  to  his  own  experience,  and  that  of  his  neighbors,  so 
that  he  would  seem  to  himself  to  be  studying  the  industrial 
life  of  actual  men  and  women  more  than  books  about  this 
industrial  life. 

This  manual  is  a  result  of  the  author's  effort  to  put  into 
practice  in  his  own  classes  the  idea  just  stated.  It  is  sent 
out  with  the  hope  that  his  experience  may  prove  valuable 
to  other  teachers  who  may  make  a  similar  effort.  So  far  as 
he  is  aware,  no  such  detailed  and  consecutive  suggestions, 
as  are  given  in  Part  I,  for  the  first-hand  observation,  classifica- 
tion, and  interpretation  of  some  of  the  most  fundamental 
facts  and  processes  of  the  present  industrial  system  ai'e  else- 
where accessible  to  the  student.  If  well  carried  out,  it  is 
believed  tliat  they  will  be  found  of  the  greatest  value,  as  they 
have  all  been  tested  in  actual  class-room  experience. 

It  is  believed  further  that  the  method  herein  pursued,  by 
which  the  laboratory  study  of  existing  economic  life  is  supple- 
mented and  enriched  by  showing  the  evolution  of  the  indus- 
trial present  from  the  industrial  past — in  short,  the  method 
of  union  between  economics  proper  and  industrial  history — ia 
here  worked  out  in  a  new  and  vital  way.  The  method  of  the 
book,  as  a  whole,  includes :  (a)  an  observational  study  of  some 
of  the  data  of  economics — facts  about  the  structure  and  func- 
tion of  different  parts  of  the  existing  economic  system ;  (d) 
the  consideration  of  a  few  facts  of  industrial  history  which  it 


8  PREFACE 

is  hoped  may  help  the  student  to  realize  that  the  present 
industrial  system  is  a  result  of  evolution;  and  {c)  an  elemen- 
tary discussion  of  some  of  the  most  fundamental  economic 
principles  in  accordance  with  which  the  present  system  now 
works.  In  short,  the  method  is  an  attempt  to  combine,  for 
pedagogic  reasons,  the  inductive,  historical,  and  deductive 
methods  in  the  same  book  and  oftentimes  in  the  same  exer- 
cise. 

It  should  be  pointed  out  that,  while  it  is  believed  that  the 
book  will  give  the  best  results  when  its  parts  are  read  in  the 
order  given,  it  may  yet  be  profitably  used  in  two  other  ways: 
(1)  Part  III  may  follow  Part  I  at  once,  and  Part  II  be  read  as 
supplementary  reading,  as  a  conclusion  to  the  course,  or 
omitted  entirely;  (2)  Parts  I  and  III  may  be  omitted,  and 
Part  II  alone  studied. 

It  should  also  be  clearly  stated  that  the  questions  were 
designed  to  be  used  differently  in  the  three  parts.  The  ques- 
tions of  Part  I  aim  at  a  considerable  degree  of  continuity,  and 
it  is  believed  will  give  the  best  results  if  every  pupil  does  his 
best  to  answer  all  the  questions  of  each  exercise.  The  ques- 
tions of  Part  II  are  not  carefully  consecutive,  and  different 
questions  may  well  be  studied  by  different  pupils  as  they  have 
special  facilities  for  getting  answers.  In  Part  III  it  is  not 
intended  that  an  exhaustive  answer  to  all  the  questions  should 
be  given.  The  subject  is  too  large  to  be  given  a  complete 
treatment  in  any  elementary  book.  It  has,  therefore,  been 
the  purpose  of  the  author  in  Part  III  to  begin  the  discussion 
of  the  most  fundamental  economic  principles  and  then  -by 
means  of  questions  to  lead  earnest  pupils  to  see  that  each  sub- 
ject leads  out  in  so  many  directions  and  so  far  that  tliey  will 
be  compelled  to  recognize  the  limitations  upon  their  own 
knowledge  respecting  it.  It  will  be  further  noticed  that 
many  subjects  ordinarily  included  in  text-books  on  economics 
have  been  wholly  omitted.  If  the  questions  of  Part  III,  there- 
fore, can  be  so  used  as  to  leave  a  deep  conviction  that  the  discus- 
sions of  the  book  are  purposely  incomplete,  and  that  the  study 


PREFACE  9 

of  economics  is  merely  begun  by  him  wlio  has  read  only  these 
pages,  their  highest  purpose  will  have  been  fulfilled. 

In  a  word,  the  ideal  course  in  economics  for  secondai'y 
schools^  has  seemed  to  the  author  to  be  one  which  seeks  to 
train  the  student  in  the  observation,  classification,  and  inter- 
pretation of  the  data  of  economics ;  make  him  conscious  of  the 
tendencies  of  great  evolutionary  movements  in  industrial 
society;  and  leave  him  in  the  presence  of  great  theoretical 
and  practical  economic  problems  humble,  but  courageous  and 
eager  for  further  study. 

The  author  gi-atefully  acknowledges  his  indebtedness  to 
many  persons  for  suggestion,  courtesy,  encouragement,  and 
criticism.  To  most,  only  this  general  acknowledgment  can 
be  made,  but  personal  mention  is  due  the  following  gentlemen 
who  kindly  read  the  book  in  manuscript:  Professor  Fred- 
erick R.  Clow,  State  Normal  School,  Oshkosh,  Wisconsin; 
Mr.  R.  E.  Cutler,  Xorthwest  Division  High  School,  Chicago; 
Dr.  H.  H.  Belfield,  Director  of  Chicago  Manual  Training 
School;  and  Professor  E.  G.  Cooley,  Principal-elect,  Chicago 
Normal  School. 

Tlie  author  desires  to  express  his  especial  gratitude  to  Pro- 
fessor Albion  W.  Small,  of  the  University  of  Chicago,  and 
to  Mr.  E  E.  Hill,  teacher  of  Civics  and  Economics,  Hyde 
Park  High  School,  Chicago,  to  both  of  whom,  at  every  stage 
of  the  work,  he  has  been  indebted  for  detailed  criticism  and 
generous  encouragement. 

The  intention  has  been  to  give,  by  means  of  footnotes 
throughout  the  text,  full  credit  to  author  and  publisher 
wberever  such  credit  is  due.  In  addition  it  is  a  pleasure  to 
acknowledge  the  receipt  of  various  special  courtesies  from  the 
following  publishers:  The  Macmillan  Company,  G.  P.  Put- 
nam's Sons,  Charles  Scribner's  Sons,  Longmans,   Green,  & 

^To  any  one  who  wishes  a  further  discussion  of  method,  the  au- 
tlior's  pamphlet  on  Methods  of  Teaching  Economics  in  Secondary 
Schools  will  be  sent  by  the  publishers  on  application. 


10  PREFACE 

Company,  Houghton,  MifHin  &  Company,  T.  Y.  Crowell  & 
Company,  D.  C.  Heath  &  Company,  Harper  &  Brothers, 
The  Werner  School  Book  Company,  Silver,  Burdett  &  Com- 
pany, Charles  H.  Nicoll,  H.  V.  &  H.  W.  Poor,  Flood  & 
Vincent. 

Chicago,  December  11,  1899. 


CONTENTS 


Dedication 5 

Preface    7 

General  Introduction 13 


PART  I 


INDUSTRIAL  OBSERVATION   AND  INTERPRETATION 

Lesson  I.  Introduction  and  Observation  of  Occupations 

II.  Classification  of  Occupations 

III.  The  Classification  Tested   . 

IV.  Diagram  of  Local  Occupations 
V.  Local  and  National  Occupations 

VI.  Study  of  Actual  Business 

VII.  Forms  of  Business 

VIII.  Utility  Defined       . 

IX.  Forms  of  Utility 

X.  Classification  of  Utilities 

XI.  Producers  and  Non-Producers  . 

XII.  Definitions      .... 

XIII.  Ownership  and  Property    . 

XIV.  Status  and  Contract 
XV.  Economic  Terms         .... 

XVI.  Graphic  Statement  of  Industrial  Facts 

XVII.  Statements  and  Questions 

XVIII.  Illustration  and  Comparison  of  Prices 

XIX.  Statistics  of  Personal  Consumption  . 


17 
18 
19 
19 
20 
21 
22 
23 
24 
27 
29 
32 
33 
35 
36 
36 
89 
40 
41 


12  CONTENTS 

PART  II 

OUTLINES  OF  THE  INDUSTRIAL  HISTORY   OF  ENGLAND  AND  THE 
UNITED   STATES 

FAOB 

Chapter  I.     The    Home,   or   Family,  Period   of    Industry   in 

England 47 

II.     The  Gild  Period  of  Industry  in  England        .         .       67 

III.  The  Domestic  Period  of  Industry  in  England  and 

America 85 

IV.  The  Period  of  the  Factory  System  of  Industry  in 

England  and  the  United  States         .        .        .     134 

PART  III 

EI,EMENTS  OF  ECONOMIC  THEORY 

Chapter  I.  Utility,  Value,  and  Contracts     ....         191 

II.  Production 216 

III.  Sharing  the  Product— Distribution     .        .        .225 

IV.  Some  Considerations  which  Affect  Production  and 

Distribution         . 250 

V.     Consumption 272 

Appendix 279 

AUTHORITIES  Cited 288 

Index 292 


GENERAL  INTRODUCTIOK 


For  a  century  the  proverb  has  been  in  vogue:  "The  proper 
study  of  mankind  is  man."  To-day  it  is  the  fashion  to 
declare  that  the  proper  study  of  mankind  is  society.  There 
is  danger  that  the  name  "sociology"  will  furnish  many  an 
unwise  teacher  with  pretexts  for  luring  pupils  away  from  sub- 
jects that  they  might  profitably  study  to  others  which  contain 
only  snares  and  illusions  for  beginners.  This  book  is  not  a 
treatise  on  sociology.  It  is,  however,  precisely  the  kind  of 
guide  to  elementary  study  of  social  facts  that  sociologists 
should  recommend. 

Sociology  declares  that  every  thing  which  every  man  does 
is  connected  Avith  every  thing  which  every  other  man  does. 
Before  it  is  possible  to  learn  this  truth  except  by  rote,  we 
must  get  acquainted  with  a  great  number  of  facts  which 
exhibit  the  i^riucij^le.  We  must  learn  to  see  how  one  act 
affects  another  in  our  own  lives;  how  one  neighbor's  conduct 
has  to  do  with  another  neighbor's  comfort;  how  the  things 
that  we  may  do  depend  on  the  things  that  others  have  done. 

There  are  two  ways  of  getting  this  knowledge.  The  one  is 
by  study  of  history,  political  economy,  and  political  science. 
1'ho  other  is  by  observing  people,  and  particularly  by  ming- 
ling with  people  in  as  many  occupations  and  circumstances  as 
possible.  Xeither  of  these  two  methods  is  self-sufficient. 
Neither  of  them  is  wholly  trustworthy  without  the  other. 

The  study  of  the  sciences  that  deal  with  particular  ways  in 

13 


14  GENERAL  INTRODUCTION 

which  men  act  in  society  will  never  lose  its  charm,  however; 
it  will  never  cease  to  enlarge  and  instruct  the  mind ;  it  will 
never  fail  to  furnish  elements  of  preparation  for  good  citizen- 
ship. By  study  of  history,  economics,  and  civics,  we  in  a  way 
acquire  as  our  own  the  experience  of  all  the  world. 

On  the  other  hand,  we  do  not  know  society  as  we  should  if 
we  learn  about  it  merely  at  second  hand.  If  we  never  saw 
machines,  but  merely  read  descriptions  of  them,  we  could  not 
become  very  expert  machinists.  If  we  never  stepped  foot  on 
a  ship,  nor  looked  upon  the  ocean,  we  would  not  be  likely  to 
have  great  skill  as  marine  architects.  In  somewhat  the  same 
way,  if  we  merely  study  the  sciences  of  society,  we  will  know, 
after  all,  only  an  artificial  substitute  for  real  men  and  women. 
We  need  to  open  our  own  eyes  and  learn  for  ourselves.  All 
the  social  facts  that  any  science  can  find  are  passing  before  us 
every  day.  We  are  not  intelligent  members  of  society  until 
we  know  how  to  think  these  facts  together  in  rational  form. 

This  book  is  a  wise  guide  to  proper  use  of  both  these 
methods.  The  student  Avho  learns  from  books  alone  is  apt  to 
be  helpless  with  his  knowledge  when  he  is  called  upon  to 
apply  it.  The  knowledge  that  comes  from  observation  alone 
is  less  likely  to  be  of  an  impractical  sort,  but  it  is  more  likely 
to  lack  breadth;  and  it  may,  therefore,  be  ill  adapted  to 
application  under  changed  circumstances.  This  book  aims  to 
give  training  that  will  make  scientific  knowledge  practical, 
and  practical  experience  scientific. 

Another  rare  feature  in  this  book  commends  it  especially  to 
those  who  want  to  secure  the  highest  order  of  results  from 
study  of  society.  The  schools  should  teach  civics,  not  to 
make  oflBcials,  and  economics,  not  to  make  financiers,  but  both 
to  make  good  citizens.     In  too  many  cases,  books  on  govern- 


GENERAL  INTRODUCTION  15 

ment  leave  the  impression  that  government  is  an  end  in  itself; 
and  books  on  economics  confirm  the  ready  belief  that  to  make 
money  is  the  supreme  duty  of  man.  This  book  tends  to  the 
impression  that  business  and  politics  are  out  of  gear  unless 
they  serve  to  promote  large  and  true  life.  Pupils  can  hardly 
follow  the  plan  of  study  here  proposed  without  gaining  more 
liberal  ideas  of  the  things  that  most  conduce  to  human  weal, 
and  are  consequently  most  worthy  and  honorable. 

The  kind  of  study  here  proposed  is  not  mere  reflection  on 
dead,  heartless  abstractions.  It  is  investigation  of  the  inti- 
mate concerns  of  actual  life.  It  stimulates  social  interest; 
it  enlarges  human  sympathy;  it  develops  love  of  justice;  it 
rouses  public  spirit ;  it  deepens  the  sense  of  civic  obligation. 
In  a  word,  it  shifts  the  pupil's  outlook  from  the  standpoint  of 
his  private  selfishness  to  that  of  the  general  welfare.  Study 
of  society  by  this  method  is  thus  not  merely  a  preparation  for 
citizenship,  it  is  an  apprenticeship  in  patriotism. 

Albion  W.  Small. 

The  University  of  Chicago. 


PAET  I 

INDUSTEIAL    OBSERVATION    AND    INTEEPRETA- 

TION 


Lessok  I 


IITTRODTJCTION'   AND   OBSERVATION   OF   OCCUPATIONS 

The  satisfaction  of  human  need  for  food,  shelter,  cloth- 
ing, amusement,  instruction,  social  life,  and  inspiration 
toward  doing  right,  costs  continual  human  effort.  To  say 
this  in  another  way,  the  problem  of  getting  a  living,  using 
this  word  in  the  largest  sense,  takes  a  great  deal  of  the  time 
and  effort  of  a  great  many  people  whom  the  student  knows. 
The  different  waj's  actually  taken  by  different  people  in  their 
efforts  to  get  a  living ;  the  conditions  imposed  upon  us  by 
nature  and  by  ourselves  through  custom  and  law ;  the  differ- 
ence between  our  present  methods  of  getting  a  living  and 
those  of  our  ancestors ;  some  queries  about  future  methods  of 
getting  a  living,  and  the  problem  of  trying  to  find  some  order, 
unity,  and  law  underlying  all  these  activities  and  processes ; 
are  the  tasks  to  which  the  student  is  invited.  For  a 
while  his  text-book  may  be  the  members  of  his  own  family, 
his  neighbors,  his  schoolmates,  and  all  those  persons  he  meets 
upon  tlio  street,  lie  will  often  bo  directed  to  observe  and 
report  upon  that  which  is  familiar  to  him,  but  every  question 
should  be  answered  with  his  best  thought,  and  in  writing,  for 
questions  will  soon  appear  that  demand  keen  observation  and 
clear  thinking.     The  exercises  will  prove  of  little  value  to  a 

17 


18  INDUSTRIAL  OBSERVATION 

student  unless  constantly  kept  related,  through  his  observation 
and  thinking,  to  actual  occupations,  persons,  and  industrial 
processes.  A  simple  way  in  which  to  begin  to  study  indus- 
trial conditions  is  as  follows : 

Make  out  an  alphabetic  list  of  fifty  different  occupations  by 
which  you  know  persons  are  regularly  getting  a  living. 

Lesson  II 

CLASSIFICATION   OF   OCCUPATIONS 

1.  Write  the  following  list  of  occupations  in  a  column 
where  they  can  easily  be  seen  at  a  glance:  Blacksmithing, 
farming,  stage-driving,  occupation  of  a  commission  merchant, 
medicine,  tramping  or  begging,  shoemaking,  quarrying, 
express  business,  rear.^estate  business,  ministry,  stealing,  car- 
pentry, mining,  driving  a  locomotive,  selling  dry-goods,  teach- 
ing, occupation  of  an  idiot,  tailoring,  fishing,  conducting  a 
street  car,  cigar-dealing,  care  of  children  and  home  by  a 
mother,  occupation  of  a  poorhouse  inmate,  watchmaking,  ice- 
cutting,  running  a  steamboat,  grocery  business,  hair-cutting, 
pleasure-seeking  by  an  idle  rich  person. 

2.  Study  the  list  to  determine  those  occupations  which  are 
at  bottom  most  alike. 

3.  Make  six  groups  of  five  occupations  each  on  the  basis  of 
this  likeness. 

4.  Give  a  name^to  each  group. 

5.  Criticize  your  grouping  by  asking  these  questions: 

a.  Are  the  groups  distinct  each  from  the  other? 
They  should  be. 

b.  Is  each  occupation  in  the  list  included  in  the 
groups?  In  case  of  a  somewhat  complex  occupa- 
tion, it  may  take  more  than  one  gi'oup  to  include 
all  its  activities.  The  question  is:  Can  all  the 
processes  of  each  occupation  be  included  in  the 
groups  formed?     They  should  be. 

6.  Be  prepared  to  give  reasons  for  your  classification,  and 
to  defend  it  in  class. 


DIAGRAM  OF  LOCAL  OCCUPATIONS  19 

Lesson  III 

THE    CLASSIFICATION    TESTED 

1.  Classify,  on  the  basis  of  the  grouping  adopted,  an  alpha- 
betic list  of  one  hundi-ed  and  fifty  occupations  not  already 
classified. 

[Note. — The  question  will  ai'ise  whether  to  classify  some 
person  from  the  point  of  view  of  the  whole  business  with 
which  he  is  connected,  thus  making  each  business  as  a  whole 
the  unit  of  classification,  or  to  classify  him  from  the  point  of 
view  of  his  individual  activity.  A  stenogi'apher  in  the  employ 
of  a  railroad  company  might  be  classified  with  railroading,  and 
one  in  the  employ  of  a  college  president  with  education,  in 
which  event  the  two  stenographers  would  appear  in  different 
groups.  On  the  other  hand,  they  might  be  classed  as  stenog- 
raphers per  se,  in  which  event  they  would  be  grouped  together. 
The  first  way  of  grouping  is  more  convenient,  more  like 
the  practice  of  the  Census  Bureau,  and  the  latter,  if  well 
done,  is  more  accurate.  On  the  whole,  for  the  purpose  of 
these  lessons,  it  will  probably  be  found  more  satisfactory  to 
classify  most  individual  occupations  on  the  basis  of  the  whole 
business  with  which  they  are  connected,  rather  than  upon  the 
hasia  of  the  individual  activities  of  the  persons  themselves.] 

2.  Make  note  of  all  occupations  difficult  to  classify. 

Lesson  IV 

DIAGRAM    OF   LOCAL  OCCUPATIONS 

1.  If  the  town  in  which  you  live  has  a  directory,  begin 
with  the  first  name  under  some  letter  and  read  consecutively 
until  the  names  of  one  hundred  persons  who  are  reported  as 
engaged  in  gainful  occupations  have  been  read.  Classify 
these  occupations  as  in  the  preceding  lesson. 

2.  If  some  of  these  occupations  can  not  bo  classified  on 
account  of  lack  of  information  about  them,  for  example, 
laborer  and  clerk,  note  also  the  number  unclassified. 


20  INDUSTRIAL  OBSERVATION 

3.  Find  what  per  cent  the  number  in  each  group  is  of  the 
hundred  occupations  noted;  and  make  a  series  of  lines,  or  bars, 
accurately  drawn  to  a  scale,  which  reijresent  by  their  lengths : 

a.  The  total  number  of  occupations  noted. 
I).  The  per  cent  which  the  number  in  each  group  is 
of  the  total. 

4.  Make  note  of  all  difficulties  for  discussion  in  class. 
[Note. — Each  pujoil  should  have  a  note-book  in  which  all 

diagrams  and  other  valuable  results  of  the  study  may  be  con- 
veniently kept.  Diagrams  may  be  made  more  attractive  by 
using  different  colors.  Some  of  the  diagrams  in  this  lesson, 
and  others  that  follow,  may  be  made  large  enough  to  be  hung 
up  in  the  recitation  room. 

If  each  pupil  has  a  different  list  of  names  assigned  from  the 
directory,  the  total  number  of  occupations  reported  on  by  the 
class  will  be  as  representative  of  the  occupations  of  the  whole 
town  or  city  as  possible. 

If  there  is  no  directory,  each  pupil  may  report  upon  the 
gainful  occupations  of  all  the  persons  residing  in  a  certain 
block,  or  within  certain  limits  along  a  certain  street,  the 
assignments  to  different  pupils  being  so  planned  that  the  total 
of  their  reports  may  be  as  representative  of  the  whole  town  as 
possible.  The  occupations  so  obtained  may  be  grouped, 
computed  in  per  cents,  and  represented  by  lines,  as  directed 
above.] 

Lesson  V 

LOCAL   AND   NATIONAL   OCCUPATIONS 

1.  Make  another  diagram  in  your  note-book  after  the 
same  plan  as  that  of  the  preceding  lesson,  except  that  the 
numbers  used  are  the  totals  for  the  class  instead  of  your 
individual  numbers. 

2.  Make  a  third  diagram  based  on  the  following  figures  of 
the  United  States'  Census  for  1890:^ 


'For  detailed  statistics  of  occupations  of  persons  in  the  United 
States  in  1890,  see  Statistical  Abstract  of  the  United  States  for  ISyn, 
pp.  30-23. 


STUDY   OF  ACTUAL  BUSINESS  21 

a.  "Whole  number  of  persons  engaged   in 

gainful  occupations  in  the  United  States,  22,735,061 

b.  Engaged  in  extractive  industries  .     .     ,    9,013,201 

c.  Engaged  in  professional,  domestic,  and 

personal  service 5,304,829 

d.  Engaged  in  trade  and  transportation    .    3,325,962 

e.  Engaged  in  transforming  industries  ,     .    5,091,669 

Lesson  VI 

STUDY    OF    ACTUAL    BUSINESS 

In  order  to  give  satisfactory  answers  to  the  following 
questions,  a  concrete  business,  no  matter  how  simple,  with 
which  the  pupil  is  best  acquainted  and  about  which  he  can 
learn  most  accurately,  should  be  chosen  by  each  member  of  the 
class.  Much  depends  upon  the  accuracy  and  directness  of  the 
information.  The  very  soul  of  this  work  is  its  dependence 
upon  facts.  In  asking  questions  pupils  need  tact.  It  may 
be  explained  that  names  of  persons  and  of  companies  are  not 
wanted.  What  is  wanted  is  to  find  out  the  machinery  of  the 
business,  just  how  it  is  carried  on. 

1.  Name  of  the  business  or  occupation. 

2.  Give  a  brief  description  of  the  land,  building  if  any,  and 
other  equipment  required  to  carry  on  the  enterprise. 

3.  Who  owns  the  land,  a  person  or  a  group  of  persons? 

4.  What  evidence  of  ownershij)  does  the  owner  have? 

5.  Who  owns  the  building? 

6.  Who  owns  the  rest  of  the  equipment? 

7.  Who  actually  carries  on  the  business,  "is  back  of"  it? 

8.  What  different  gi'ades  of  helpers  does  he  have? 

9.  Give  the  apj^roximate  number  in  each  grade. 

,  10.  Give  the  ordinary  business  name  of  each  form  of  pay- 
ment  which  is  made  to  owners  simply  as  owners  of  something  - 
necessary  to  the  business. 

,  i.  ft.  Give  the  ordinary  name  of  each  form  of  payment  that  ,,. 

'is  made  to  persons  as  active  participants  in  carrying  on  the  .. 
business,  both  in  the  management  and  in  the  ordinary  work,   -^"^"^^i 


22  INDUSTRIAL  OBSERVATION 

12.  Are  there  any  other  persons,  or  groups  of  persons,  aside 
from  those  who  furnish  it  material  or  buy  its  product,  who 
regularly  receive  some  payment  from  this  enterprise?  If  so, 
name  them  and  explain  on  what  ground  they  receive  these 
payments. 

13.  Enumerate  all  the  different  groups  of  persons  who, 
from  what  they  own  or  from  what  they  do,  regularly  furnish 
something  necessary  for  the  carrying  on  of  this  enterprise. 

14.  Give  the  business  name  of  each  of  these  persons  or 
groups. 

Lessoi^  VII 

FOEMS   OF   BUSINESS 

In  the  preceding  lesson  some  important  words  were  used 
that  may,  perhaps,  be  new  to  certain  members  of  the  class  and 
not  understood  alike  by  others.  To  the  end,  therefore,  that 
the  words  may  have  a  definite  and  common  meaning,  the 
following  questions  are  proposed : 

1.  Find  actual  business  enterprises  illustrating  as  many  of 
these  words  as  possible : 

a.  Partnership. 

1).  Stock  company. 

c.  Corporation. 

d.  Profit-sharing  enterprise. 
\  e.  Cooperative  enterprise. 

'/.  Trust.^ 

2.  Write  a  description  of  each  with  the  aim  to  distinguish 
it  from  all  the  others. 

3.  Find  out  something  about  the  manner  of  organizing », 
business  of  each  kind  in  accordance  with  the  laws  of  your  state. 

4.  Which  is  most  commonly  found  in  your  locality?  Why? 

5.  What  is  the  object  of  each  form  of  organization? 

'For  meaning  of  terms,  laws  of  state,  etc.,  consult:  the  diction- 
ary; the  encyclopedia;  Lalor,  Cyclopedia  of  Political  Science  and 
Political  Eco7iomy,  vol.  Ill,  index — Maynard,  Merrill  &  Co.,  New 
York ;  the  Revised  Statutes  of  your  own  State ;  Schloss,  Methods  of 
Industrial  Remuneration — 3d.  ed.,  1894,  G.  P.  Putnam's  Sons,  New 
York,  or  3d.  ed.,  1898,  Williams  &  Norgate,  Oxford. 


UTILITY  DEFINED  23 

Lessor  VIII 

UTILITY   DEFINED 

In  the  lessons  that  have  preceded,  opportunity  has  been 
given  for  the  idea  to  emerge  that  the  apparent  chaos  of  busi- 
ness activity  which  one  observes,  especially  upon  the  corner  of 
a  crowded  city  street,  is  only  apparent,  and  that  all  these 
activities  can  be  reduced  to  five  or  six  well  defined  groups  of 
activity.  It  has  also  appeared  from  the  study  of  concrete 
business  units,  or  enterprises,  that,  while  there  is  great 
variety  in  form  of  organization  and  relationship  of  persons  to 
the  enterprise,  the  same  functions  appear  in  all  enterprises 
whether  they  are  all  performed  by  one  person  or  by  many. 
As  both  of  these  results  are  in  the  direction  of  a  perception  of 
uniformity  and  simplicity  and  order  in  what  at  first  seemed  to 
be  very  complex  phenomena,  there  remains  one  further  step 
to  take  in  the  same  direction.  Can  we  not  find  some  common 
puriDOse  in  the  activities  of  all  workers?  Is  it  not  possible  to 
discover  some  principle  of  unity  which  will  allow  all  workers 
to  be  thought  of  together?  Are  they  all  in  fact  doing 
fundamentally  the  same  thing,  namely,  creating  utility? 

1.  Write  a  brief  but  complete  description  of  a  typical  day's 
work  by  some  one  intimately  known  to  you. 

2.  What  was  the  object,  or  objects,  upon  which  at  some 
time  during  the  day  he  exerted  his  activity? 

3.  Tell,  precisely,  what  change  took  place  in  this  object  as  a 
result  of  the  expenditure  of  the  worker's  energy. 

4.  How  does  the  desirability  of  the  object,  to  those  in  any 
way  affected  by  the  change,  compare  after  the  expenditure  of 
energy  with  its  desirability  before?  Is  the  object  more  or  less 
desirable? 

[Note. — The  word  "desirability"  is  here  used  not  in  an 
absolute  sense,  but  as  related  to  human  wants.  These  wants 
are  not  always  wise,  or  moral.  "Primarily,  and  as  a  condition 
to  his  [man's]  mere  existence,  ho  requires  food,  commonly, 
also,  clothing  and  shelter.     lie  has  appetites  for  art,  music. 


34  INDUSTRIAL  OBSERVATION 

philosophy,  cigars,  and  vice.  Ho  desires  comforts  and  lux- 
uries, protection  from  the  violence  of  nature,  from  the  wrongs 
of  men,  and  from  the  attacks  of  beasts  and  microbes.  He 
wants  his  steak  broiled  and  his  clothes  brushed.  He  likes  to 
be  preached  to,  and  sung  to.  He  wants  books  and  boats,  and 
racehorses,  laces,  parks,  theatres,  and  eyeglasses,  chairs, 
balloons,  railroads,  panoramas,  fortune-tellers,  phrenologists, 
and  humbugs."^] 

5.  From  the  point  of  view,  therefore,  of  desirability  of  the 
object  worked  upon,  as  different  men  judge  desirability,  what 
did  the  person  really  do,  or  attempt  to  do? 

6.  Show  whether  or  not  other  workers,  working  for  gain, 
from  affection,  or  from  a  charitable  motive,  attempt  to  make 
a  similar  change  in  the  objects  they  work  upon.  Give  illus- 
trations. 

7.  Write  out  a  definition  of  the  word 

Lesson  IX 

rOEMS   OF   UTILITY 

It  is  the  want-satisfying  quality — utility,  that  the  wants  of 
mankind  spur  men  on  to  try  to  produce.  The  question  now 
comes,  how  is  utility  produced?  Must  men  have  materials  in 
which  to  store  this  quality?  If  so,  what  is  the  source  of  these 
materials?  How  can  men  manipulate  materials  so  that  utility 
may  be  added  to  them?  Is  complete  utility  added  to  material 
by  one  worker  as  a  rule,  or  does  the  same  material  pass  through 
many  hands  in  succession,  each  worker  adding  some  utility? 
Since  utility  is  a  quality  in  material  which  satisfies  the  want 
of  persons,  may  changes  in  human  wants,  as  Vv'ell  as  changes 
in  objective  materials,  cause  utility  to  emerge  and  disappear? 

If  the  following  specific  questions  are  carefully  answered, 
much  light  may  be  thrown  upon  the  more  general  questions 
of  the  preceding  paragraph. 

'Davenport,  Outlines  of  Economic  Theory,  p.  14 — 1896,  The  Mac- 
millan  Co.,  New  York. 


FORMS  OF  UTILITY  25 

1.  What  human  wants  are  there  that  are  sometimes  satisfied 
directly  by  nature,  without  other  effort  by  man  than  that 
required  to  appropriate  what  nature  furnishes?  Give  as 
varied  examples  as  possible. 

2.  When  man  does  not  have  his  want  satisfied  by  nature, 
but  creates  this  quality  of  satisfying  want  (utility),  from  what 
source  does  the  material  upon  which  he  works,  and  in  which 
he  stores  utility,  come?  Illustrate.  Is  there  any  other 
primary  source?  .  t-'^ 

3.  Give  examples  of  utilities  that  have  been  wholly  created 
by  the  effort  of  one  man,  possibly  in  a  succession  of  processes, 
or  partial  processes ;  give  examples  where  two  workers  in  suc- 
cessive processes  have  created  utility ;  examples  of  three  work- 
ers ;  more  than  three ;  the  example  where  the  whole  process 
of  creating  utility  is  divided  among  the  largest  number  of 
grades  of  workers  known  to  you. 

4.  Define  division  of  labor. 

5.  Give  illustrations  of  division  of  labor  among  places; 
among  persons. 

6.  Give  in  one  word  the  kind  of  utility  that  is  added  to  coal 
by  being  broken  out  of  the  solid  vein,  to  clay  when  pressed 
into  moulds  to  make  brick,  to  stone  when  carved  into  a 
statue, 

7.  Give  another  word  which  describes  the  kind  of  utility 
created  by  carrying  lumps  of  coal  from  a  mine  to  a  city, 

8.  Name  in  one  word  the  kind  of  utility  that  coal  possesses 
by  being  in  a  grate  in  December  rather  than  in  August,  by 
having  ice  in  the  house  in  August  rather  than  in  December. 

9.  Give  other  examples  of  each  kind  of  utility. 

10.  When  the  actor  arranges  scenes,  costumes,  attitudes, 
and  facial  expressions  so  as  to  send,  on  the  vehicle  of  vibrating 
ether,  intense  satisfaction  to  the  eye  of  the  onlooker,  show 
whether  or  not  he  creates  utility;  show  whether  or  not  ho  also 
creates  utility  when  he  sends  pleasing  sounds  on  the  vehicle  of 
vibrating  air. 

11.  Give  other  kinds  of  utility  if  you  can. 


26  INDUSTRIAL  OBSERVATION 

12.  Is  the  spiritual  uplift  which  comes  from  the  preacher 
utility?  Why?  Is  the  legal  advice  which  a  lawyer  gives  to  a 
client  utility?    Why? 

13.  Show  that  Phillips  Brooks,  as  a  preacher,  and  the  boy 
who  blacked  his  boots,  were  doing  fundamentally  the  same 
thing. 

14.  If  men  feel  new  wants  for  things  to  which,  though  in 
existence  before,  they  had  been  indifferent,  do  those  things 
acquire  utility?  Why?  Give  examples.  Do  spinning  wheels, 
old-fashioned  furniture,  etc.,  that  once  lay  forgotten  in 
garrets  and  lumber  rooms,  illustrate  the  point?  Give 
reasons. 

15.  If  men  cease  to  care  for  some  thing  which  they  formerly 
wanted,  does  this  lose  utility  to  some  degree?  Why?  Give 
examples. 

il6.  What  are  the  effects  of  fashion  upon  the  utility  of  a 
commodity?     Illustrate. 

17.  Discuss  the  following  formula,  and  its  interpretation  as 
a  convenient  short  statement  of  the  truth  about  any  productive 
enterprise.  Do  you  think  of  any  business  enterprise  that  can 
not  be  included  in  the  formula?     Explain. 

> ~P'  f,      a.  Society+man+capital+  natural resources=utility. 
h.  A  more  accurate   statement    might  be:     Society, 
combined  with 

.,..,,  (As  undertakers  ) 

individual  men,  |  ^^  ^.^^^^^^  ^^^^^^^^  ^ 

combined  with  capital,  combined  with  natural 
resources,  may  result  in  utility. 
c.  Which  formula  may  be  interpreted  as  follows :  In 
subordination  to  the  public  opinion  and  statute 
laws  of  the  community  as  a  whole,  individual  men 
direct  human  energy  in  the  use  of  tools  and  ma- 
chinery upon  the  materials  and  forces  which  nature 
furnishes,  in  order  to  produce  something  to  satisfy 
human  want. 


CLASSIFICATION  OF  UTILITIES  27  . .         . 

18.  Do  individual  men  ever  carry  on  business  enterprises  (J^^"" 
for  the  production  of  utility  in  violation  of  public  opinion  and 
statute  laws  of  society?     Give  examples. 

19.  Which  is  the  more  common  method  of  carrying  on 
business — subject  to  the  will  of  society  or  in  violation  of  it? 
Give  reasons. 

20.  Do  individuals  ever  cause  changes  in  public  opinion  and 
in  laws  for  the  benefit  of  their  own  business?     If  so,  how? 

21.  What  is  the  hai'm  of  it?  ^,.  -  >   * 

22.  How  can  it  be  helped? /a4^;/«^&-*Uv.  ■'^:.  '^f^'l'fjJ'^'! 
[Note. — For  a  series  of  interesting  articles  entitled    The 

Conduct  of  Great  Businesses^  consult  "Scribner's  Magazine, " 
beginning  January,  1897.  ( /^a'^^Xm--'^-^^  ^i'Y<>-r-y^} 

The  subjects  of  the  separate  ai'ticles  are:  *'The  Department 
i)tore,"  "The  Business  of  a  Factory,"  "The  Working  of  a 
Bank,"  "The  Business  of  a  Newspaper,"  "The  Modern  Busi- 
ness Building,"  "The  Business  of  a  Great  Wheat  Farm,"  "A 
Great  Hotel."] 

Lesson  X 

CLASSIFICATION   OF   UTILITIES 

It  often  takes  good  thinking  to  be  able  to  state  clearly  what 
it  is  that  one  does  not  understand.  But,  if  the  pupil  strives 
to  do  this,  he  will  often  help  not  only  himself,  but  others. 

We  have  seen  in  the  preceding  lessons  that  man's  wants 
range  from  the  most  primary  physical  wants  to  the  highest 
spiritual  ones.  There  is,  therefore,  good  reason  for  calling 
every  quality  in  matter  which  tends  to  satisfy  any  want,  or 
tends  to  prevent  the  emergence  of  a  want,  a  utility.  There 
is,  however,  such  a  difference  in  the  duration  of  utilities  that 
it  is  worth  while  to  give  our  attention  to  this  difference.  On 
the  basis  of  the  duration  of  utilities  two  great  classes  of  goods 
may  be  formed. 

1.  When  utility  is  stored  in  a  bicycle,  by  how  many  persons 
in  succession  can  it  be  partially  appropriated? 

2.  Compare  the  utility  of  a  book,  of  a  house,  of  furniture, 
with  that  of  a  bicycle.     Give  other  examples. 


28  INDUSTRIAL  OBSERVATION 

3.  The  utility  of  a  bicycle  is  said  to  be  potential.^ 

4.  When  utility  is  given  to  air  by  a  sweet  singer,  or  to 
ether  by  a  fine  actor,  show  whether  or  not  this  utility  can  be 
partially  appropriated  by  many  persons  in  successive  moments, 
or  hours.  The  vibrations  of  one  rendition  of  the  song, 
not  the  singer's  vocal  cords  or  power  to  sing,  should  be 
thought  of. 

5.  Give  other  similar  examples. 

6.  The  utility  of  a  song  is  said  to  be  actual.^ 

7.  Is  the  utility  of  clothing  actual,  or  potential?     Of  fuel? 
..Of  food? 

8.  Is  it  hard  to  draw  the  line  with  accuracy  between  the  two 
classes  of  utilities?     Why? 

9.  Is  it  worth  while  to  attempt  to  make  the  two  classes?, 
Why? 

10.  Is  it  hard  to  dravv  the  line  with  accuracy  between  plants 
and  animals?     Give  reasons. 

i"The  utility  of  a  commodity  is  said  to  be  2^otential  when  the 
power  of  utilizing  can  be  transferred  any  number  of  times." 
— Shirres,  An  Analysis  of  the  Ideas  of  Economics,  p.  241—1893, 
Longmans,  Green,  &  Co.,  New  York. 

2  "The  utility  of  a  commodity  is  said  to  be  actual  when  the  trans- 
feree merely  receives  actual  benefit,  enjoyment,  or  utility  in  the 
present."    The  same,  p.  241. 

''Everything  that  affects  our  senses,  whether  it  be  part  of  the 
external  world  in  which  men  live,  or  a  positive  or  negative  act  of 
one  or  more  men  with  respect  to  another  man,  may  be  a  commodity, 
i.e.,  it  may  satisfy  a  want,  extinguish  a  painful  sensation,  or  engen- 
der a  pleasurable  one.  "What  is  necessary  is,  that  what  we  consider  a 
commodity  should  be  brought  to  our  knowledge,  by  means  either  of 
our  nerves  of  general  sensibility,  or  of  our  specific  nerves;  that  is: 
it  must  either  affect  our  sense  of  touch,  appearing  hard  or  soft, 
heavy  or  light,  warm  or  cold,  or  else  our  senses  of  taste,  smell,  sight, 
or  hearing.  Hence  we  must  regard  as  being  equally  commodities: 
bread,  clothing,  medical  advice,  the  speech  or  pleadings  of  counsel, 
the  credit  embodied  in  a  bill  of  exchange  or  contract,  the  vocal  per- 
j  formance  of  a  prima  donna,  the  resort  of  customers  to  a  place  of 
'  business,  the  abstention  from  competition  on  the  part  of  manuf ac- 
jturers  restrained  by  the  exclusive  patent  rights  of  another,  the 


PRODUCERS   AND   NON-PRODUCERS  29 

11.  Is  it  worth  while  to  attempt  to  make  two  classes  of 
living  things?     Why? 

12.  Define  utility. 

a.  Actual. 
h.  Potential. 

[Note. — A   distinction    should    be   made    between   utility 
which   is  a  quality,  and   the  material,  or  yehicle,  in  which 
utility  resides  or  travels.     Any  material  possessing  utility  may  ' 
be    called  a   "good"    or   "commodity."     Goods    possessing  ; 
potential  utility  may  be  called  "wealth,"  and  goods  possessing; 
actual  utility  may  be  called  "service."     We  buy  the  service; 
of  a  teacher,  singer,  or  preacher;  and  wealth  from  a  farmer! 
and  a  weaver,  in  potatoes  and  cloth.] 

•13.  GiTC  a  list  of  twenty-five  forms  of  service;  of  twenty-  1  J^^ 
five  forms  of  wealth.  W-k^a^ 

14.  Criticize  the  following  classification  of  utilities  with 
especial  reference  to  the  position  of  form,  place,  and  tjme 
utilities:  l^^^^-^^^^ 


Utility. 


1.  Form.^-   i  ^    ^^^ 
Actual.,     \    2.  Place. ■-■*'•    ^'   '^  '    J      ,, 

1.  Form.  J^^f^. 


r 

bial.  \ 
\  [  3.  Time.    ^ '•-^-    ^^' 


Potential.  \    2.  Place.--^^*'-''-^ 


15.  If  the  diagram  is  thought  to  be  correct,  give  an 
example  of  a  utility  for  each  of  the  six  numbers  at  the  right 
of  the  diagram. 

Lesson  XI 

PRODUCEKS    AND    NON-PRODUCERS 

The  purpose  of  this  lesson  is  to  delay  the  mind  still  longer 
upon  the  processes  by  which  men  create  utility,  and  to  bring 
out  as  clearly  as  possible  the  distinction  between  producers 

abstention  from  bidding  at  an  auction  on  the  part  of  capitalists 
restrained  by  some  (possibly  altruistic)  interest,  and  the  discoveries 
of  the  scientific  investigiitor." — Pantaleoai,  Pure  Economics,  pp. 
03-65—1898,  The  Macmillan  Co.,  New  York. 


30  INDUSTRIAL  OBSERVATION 

and  non-producers.  Until  recent  years  the  common  view  was 
that  only  those  persons  who  were  producers  of  wealth,  engaged 
in  storing  utility  in  some  material  which  allowed  men  to  be  a 
long  time  in  appropriating  it,  were  productive.  A  more  recent 
view  is  that  any  person  who  succeeds  in  creating  utility  is  a 
producer,  whether  that  utility  be  a  fleeting  service  or  an 
enduring  form  of  wealth.  Only  those  persons  who  for 
some  reason  fail  to  create  utility  are  non-producers.  In 
judging  of  childi'en  and  the  aged  as  producers  or  non-pro- 
ducers, will  you  think  of  their  whole  lives  or  of  a  few 
years  only?    Why? 

1.  Which  class  of  utilities  (actual  or  potential)  does 
the  extractor  usually  produce?  Illustrate  for  typical  ex- 
tractors. 

2.  Which  class  does  the  transformer  produce?       "-(V-^-a"-'  - 

3.  The  transporter?  / 

«.  In  carrying  goods?       /^<*-2l-^c«-' v  j  ,n  £^i-<-^ 

i.  In  carrying  persons?    au^XU^c  ' 

4.  The  transferrer?  ,,    -^-^'  .-^^  -e^, 

5.  The  servant?  -■'  j/Af»jLtAju, 

6.  The  parasite? 

7.  Illustrate  for  each  group. 

8.  Show  whether  the  net  result  of  a  true  parasite's  life  is  to 
increase,  or  decrease,  the  utilities  of  the  world. 

9.  Is  his  life  productive  or  non-productive?     Of  what? 

10.  Suppose  a  man  tries  to  sing,  and  fails ;  is  he,  so  far  as 
this  effort  is  concerned,  productive  or  non-productive?  Of 
what? 

11.  If  a  man  tries  to  make  a  new  machine,  and  fails ;  is  he 
productive  or  non-productive?     Of  what? 

12.  Define  producer.     Non-producer. 

13.  Are  most  of  the  mothers  and  housekeepers  in  our 
homes,  who  are  not  reported  in  the  Census  as  engaged  in 
gainful  occupations,  producers  or  non-producers?  Of  what? 
What  have  you  to  say  of  children  and  the  aged? 

14.  Criticize  the  following  diagram : 


PRODUCERS  AND   NON-PRODUCERS 


31 


Natural. 


Goods 
liaving  ■ 
utility. 


Having   C  Rainbows.  ) 

actual    ■<  C  Natural  service, 

utility.    (  Cooling  breezes.     ) 


Modified 
by  man. 


Having 

potential 

utility. 


Having 
actual 
utility. 


Having 

potential 

utility. 


'Fertile  soil. 

Mines. 

Standing  timber. 
'  Music. 

Iijstruction. 

Hair-cutting. 
'  Houses. 

Cultivated  soil. 

Tools. 

Books. 


Natural  wealth. 

Human  service, 
service  proper. 

Wealth  proper. 


15.  Criticize  the  following  diagram: 


ECONOMIC   CLASSIFICATION   OF  MEN 


'  Servants. 
Producers 
of  utility. 


Men. 


Dependents. 
Non-pro- 
ducer.s  of 
utility. 


Those  who  serve 
as  directly  as  pos- 
sible -  produce  ac- 
tual utilities. 


{Personal. 
Domestic. 
Public. 


Servants 

usually 

so 


I.  Professional. 


Transferrers. 


Those  who  serve  less 
directly — producepo- 
^  tential  utilities. 


,  Transporters  of  persons. 
Extractors. 
Transformers. 
Transporters  of  goods. 


Those  wlio  are  able  to  serve — to 
produce  utility — and  yet  are 
dependent  from  choice. 


Parasites. 


Tliose  who  are  unable  to  serve  [  Defectives, 
— to  produce  utility — through!    the  unfortu- 
misfortune  or  inability.  )    nate  poor, 

t  etc, 


32  INDUSTRIAL  OBSERVATION 

Lesson  XII 

DEFINITIONS 

In  making  the  following  definitions,  if  the  pupil  depends 
more  upon  his  own  thinking  than  upon  any  definitions  found 
in  a  book,  he  will  be  the  gainer.  His  attention  has  been 
called  in  the  j^receding  lessons  to  all  the  realities  for  which 
these  words  are  names.  He,  therefore,  now  has  the  difficult 
but  definite  task  of  trying  to  make  his  definition  of  each  word 
include  all  the  individuals  that  belong  to  that  class,  and  none 
that  do  not. 

Plato's  well-known  definition  of  man  as  "a  two-legged 
animal  without  feathers"  was  faulty,  because  his  pupil  could 
bring  to  him  a  plucked  fowl,  and  say,  "Your  definition  makes 
this  a  man."  The  definition  was  too  inclusive.  On  the 
other  hand,  a  definition  of  man  which  would  apply  to  Anglo- 
Saxon  men  only  would  err  in  the  other  direction  of  not  being 
inclusive  enough.  A  perfect  definition  of  man  would  include 
all  animals  that  are  men,  and  exclude  all  animals  that  are  not 
men.  Oftentimes  a  perfect  definition  cannot  be  made:  a 
good  one  always  requires  good  thinking. 

1.  Define  and  illustrate  the  following  words: 

a.  Extractor.  h.  Utility. 

h.  Transformer.  I.  Actual  utility. 

c.  Transporter.  m.  Potential  utility. 

d.  Transferrer.  w.  Production. 

e.  Servant.  o.  Consumption. 

f.  Dependent.  p.  Division  of  Labor. 

g.  Landlord.  q.  Service. 
h.  Capitalist.  r.  Wealth. 
t.  J  Undertaker.  s.  Parasite. 
/.  ^Laborer. 

2.  If  the  machine  shops  of  a  railway  company  are  taken  as 
an  illustration  of  a  transforming  enterprise,  it  is  found  that 


OWNERSHIP  AND  PROPERTY  33 

transforming  enterprises  in  general    require    the    following 
functions  of  persons : 


Transforming  Enterprises 


'Society  function 
Landlord  function 
Capitalistic  function 
Undertaking  function 
Ordinary  labor  function. 


Choose  a  typical  business  in  the  extractive  group,  transfer- 
ring group,  transporting  group,  and  servant  group,  and  ask,  in 
each  case,  whether  or  not  the  enterprises  of  the  group  require 
all  of  the  same  functions  as  those  given  above.  Do  you  find 
any  exceptions?    Explain. 

Lesson  XIII 

OWNERSHIP   AND    PROPERTY 

The  observation  and  thought  of  the  class  have  now  been 
directed  to  the  great  mass  of  humanity  about  them  as  composed 
of  men  and  women  who,  from  the  economic  point  of  view, 
are  busily  engaged  in  the  process  of  satisfying  their  wants  by 
producing  and  consuming  a  great  variety  of  utilities.  It  is  also 
a  well-known  fact  that  some  utilities  which  men  consume  they 
themselves  produce,  but  that  in  a  majority  of  cases  men  expect 
to  give  up  goods  possessing  the  utility  which  they  have  pro- 
duced in  excess  of  their  own  wants,  to  others,  in  exchange  for 
the  different  kinds  of  goods  possessing  the  utility  that  others 
have  produced.  Consideration  will  be  given  later  both  to  the 
subject  of  original  production,  and  the  facilities  for  exchange 
of  goods.  Just  at  this  point  the  fundamental  importance,  of 
ownership  ig  to  be  emphasized.  Ownership  was  mentioned  in 
Lesson  VI,  and  the  word  is  familiar  to  everybody ;  but  perhaps 
some  fail  to  realize  how  fundamental  it  is  to  existing  methods 
of  getting  a  living.  In  fact,  almost  all  modern  processes  of 
creating,  exchanging,  and  consuming  utilities  rest  on  the 
foundation  of  private  property,  or  ownership.  It  is  interest- 
ing to  try  to  understand  what  private  ownership  really  means 
and  what  are  its  alternatives. 


34  INDUSTRIAL  OBSERVATION 

1.  Look  up  the  meaning  of  property  right  and  ownership  in 
the  dictionary  and  the  encyclopedia. 

2.  Show  that  ownership  means  at  least  the  right  to  use  in 
one's  own  person  the  thing  owned. 

3.  If  a  person  owns  land,  must  he  cultivate  it  himself  if  he 
is  to  get  any  utility  from  it?  If  not,  in  what  other  ways  can 
he  get  utility  out  of  it? 

4.  If  a  man  owns  a  thing,  must  he  continue  to  own  it?  If 
not,  name  the  ways  by  which  he  may  dispose  of  it  during  his  life. 

5.  Does  he  have  power  to  say  what  shall  be  done  with  hiE» 
property  after  his  death?    Illustrate. 

,  6,  The  Roman  lawyers  defined  full  ownership  to  be  ju^ 
:utenm\friienUi,'et  diiiteiiS,i.  Translate  and  illustrate  eacl 
part  of  this  definition. 

7.  Who  may  own  property  in  the  state  in  which  you  live? 
Give  authority. 

8.  Make  a  list  of  typical  things  which  an  American  citizei 
may  own  in  your  state.  ,  ' 

9.  What  things  are  there  in  your  town  that  private  citizem 
do  not  individually  own?     Make  a  list  of  them. 

10.  To  whom  do  they  belong?  What  kind  of  property  arc 
they? 

11.  What  things  about  you  are  not  represented  in  either  ol 
the  above  lists? 

/  12.  Make  an  estimate  in  money  of  the  value  of  public- 
social — property  in  your  town,  city,  county,  or  state.  Is  such 
property  increasing? 

13.  If  some  things  are  not  fully  owned  by  anybody,  why  are 
they  not? 

14.  Is  the  list  of  things  that  may  be  private  property,  the 
same  in  all  countries  at  the  same  time?  In  the  same  country 
at  different  times?    Illustrate. 

15.  Who  decides  this  in  the  United  States? 

16.  Give  examples  from  history  for  each  answer  in  14. 

17.  What  kind  of  ownership  does  socialism  propose?  Com- 
munism?   Anarchy? 


STATUS  AND  CONTRACT  35 

Lesson"  XIV 

STATUS  AND   CONTEACT 

It  is  the  purpose  now  to  call  attention  to  the  great  number 
of  agreements,  bargains,  or  contracts,  that  determine  the  eco- 
nomic relations  of  men  to  each  other.  In  the  days  of  slavery 
and  serfdom  the  relations  of  these  classes  to  their  superiors 
were  largely  determined  by  birth,  custom,  or  mere  status  of 
the  parties  concerned.  It  may  be  objected  that  the  conditions 
under  which  many  men  make  contracts  to-day  are  such  that 
they  live  very  hard  lives,  but  the  fact,  nevertheless,  remains  that 
in  form  their  lives  are  lived  in  fulfilment  of  certain  agreements 
that  they  themselves  make.  Some  reasons  why  they  sometimes 
can  not  make  better  bargains  will  be  briefly  discussed  later. 

1.  Look  up  the  meaning  of  the  words  "status"  and  "con- 
tract" in  the  dictionary. 

2.  What  freedom  do  men  in  your  state  have  to  make  any 
kind  of  contract  with  each  other  they  choose?  Give  examples 
of  limitations. 

3.  Give  examples  of  relations  between  persons  which  are 
determined  by  a  contract,  verbal  or  written. 

4.  Apply  the  words  status  and  contract  to  explain  the 
difference  between  a  slave  in  the  United  States  before  the  war, 
and  the  condition  of  men  who  work  for  salaries  or  wages,  now. 

5.  Enumerate  the  particulars,  if  any,  in  which  the  eco- 
nomic condition  of  the  slave  was  better  than  that  of  the 
workman  of  to-day. 

Keep  these  facts  in  mind  if  you  ever  hear  the  phrase  "pass- 
ing from  the  condition  of  status  to  that  of  contract." 

6.  Show  the  relation  between  the  fact  of  private  property  in 
its  full  sense  (the  right  to  dispose  of,  to  possess  and  use  in 
person,  and  to  enjoy  the  fruit  of),  and  the  fact  that  some  men 
begin  their  business  lives  as  employers  and  others  as  employees. 

7.  Among  a  people  who  subsist  by  hunting  are  some  persons 
employed  and  some  employers,  as  among  us?    Why? 

8.  Show  the  relation  between  the  right  of  private  property 


36  INDUSTRIAL  OBSERVATION 

and  the  fact  of  the  existence  of  a  so-called  "idle  rich  class"  in 
modern  society. 

9.  How  does  this  class  get  a  living? 

10.  Show  that  the  goods  which  come  to  men  as  landlords, 
capitalists,  undertakers,  and  wage-workers  are  dependent  npon 
the  right  of  private  property  and  a  large  freedom  of  contract, 

11.  Show  that  the  right  of  private  property  and  large  free- 
dom of  contract  are  fundamental  to  the  existing  business 

iy  /       relations  and  enterprises  of  extractors,  transformers,  transfer- 
/^^  rers,  transporters,  and  servants. 

*     '•  Lesson  XV 

ECONOMIC   TEEMS 

The  proof  of  understanding  is  right  use.  Some  new 
words,  and  other  more  familiar  ones  having  technical  mean- 
ings, have  been  introduced  in  the  foregoing  lessons.  May  not 
each  now  be  used  correctly  in  a  continuous  narrative?  This 
need  not  be  long,  but  each  word  should  be  used  accurately  in 
its  technical  sense,  if  there  is  a  difference  between  this  and  its 
ordinary  meaning. 

Write  the  complete  history  of  the  making  of  a  loaf  of 
bread,  a  pair  of  shoes,  a  coat,  or  some  other  common  article. 
The  essay  should  contain  appropriate  mention  of  the  activity 
of  men  in  each  of  the  first  five  economic  groups,  extractive, 
transforming,  etc.;  also  the  words,  utility,  consumption, 
ownership,  production,  private  property,  contract,  under- 
taker, capitalist,  landlord,  workman,  want,  service,  wealth, 
division  of  labor,  rent,  interest,  Avages,  money,  profits,  and 
value. 

Lesson  XVI 

GKAPHIC    STATEMENT    OF    INDUSTEIAL    FACTS 

As  men  are,  as  a  rule,  engaged  in  the  production  of 
utilities  in  order  that  they  and  those  dependent  on  them  may 
themselves  consume  those  utilities,  or  other  utilities  which 
they  get  in  exchange,  it  is  an  interesting  question  to  ask  how 


GRAPHIC  STATEMENT  OF  INDUSTRIAL  FACTS       37 

men  compare  with  each  other  in  the  vahie  of  utilities  wliich 
finally  come  to  them  for  consumption.  To  this  end  a  compi- 
lation of  answers  to  the  following  questions  will  be  found  to 
contribute  much : 

1.  Xame  of  the  occupation  reported  upon? 

2.  Under  wliose  direction  does  the  person  work? 

a.  His  ov,u?  '  • 

J).  A  single  employer?  \^^£jO-i 

c.  A  jirivate  corporation?  /  ^ ' 

d.  A  jDublic  corporation  (town,  city,  state,  etc.)? 

3.  What  are  his  hom-s  of  work  and  leisure?  "^ 

a.  Hours  actually  at  work  per  day? 

h.  Hours  daily  in  going  to  and  from  work? 

c.  Hours  of  holiday  per  week,  excluding  Sunday? 

d.  Hours  of  work  on  Sunday? 

e.  Length  of  annual  vacation  for  which  the  worker 
is  paid  at  whole  or  partial  rate  of  regular  pay- 
ment? 

4.  Detailed  progi'am  of  a  typical  day's  work? 

5.  How  paid? 

a.  Amount  of  payment  per  month? 

b.  How  is  this  determined  (piece-wages,  time-wages, 
commissions,  etc.)? 

c.  How  often  paid? 

d.  Form  of  payment  (currency,  check,  truck,  etc.)? 

6.  Effect  of  occupation  on  the  worker? 

a.  Ph3'sically? 

b.  Mentally? 

c.  Morally? 

7.  Number  of  persons  dependent  upon  earnings? 

8.  Contented,    or    discontented,   with    the    person's    own 
reasons  for  either? 

9.  Summarize  the  answers  of  different  members  of  the  class 
ii[ion  the  following  diagi'am: ' 

'The  diagram  may  be  so  enlarged  as  to  give  a  line  for  each  stu- 
dent's report. 


38 


INDUSTRIAL  OBSERVATION 


— 

— 

— 

— 

— 

Name  of  occupation. 

Economic  gi-oup. 

For  whom  working. 

Hours  of  work  per  day. 

— 

Hours  to  and  from  work. 

Time  for  Ixmcheon. 

Hours  of  holiday  per  week. 

Work  on  Sunday. 

Length  of  annual  vacation. 

Amount  of  wage  per  month. 

— 

— 

— 

— 

— 

— 

— 

— 

How  determined. 

When  paid. 

In  what  form  paid. 

— 

Physical  effect  of  work. 

— 

— 

— 

— 

Mental  effect. 

— 

— 

— 

— 

— 

Moral  effect. 

Number  of  persons  dependent. 

Contented. 

Worker's  reasons. 

STATEMENTS  AND   QUESTIONS  39 

Lesson  XVII 

STATEMENTS   AND    QUESTIONS 

1.  Eead  all  the  items  in  each  vertical  column  in  succession. 

2.  Make  a  statement  after  each  column  is  read.  For  exam- 
ple, after  reading  items  under  "hours  of  work  per  day,"  the 
statement  might  be:  "The  workday  of  some  men  is  much 
longer  than  that  of  others;"  and  after  reading  the  items 
under  "amount  of  wages  per  month,"  the  statement  might 
be:  "There  is  a  variation  in  wages,  among  the  people  here 
described,  from  $ —  per  month  to  $ —  per  month." 

[Note. — Each  of  these  statements  is  simple  by  itself,  and  its 
truth  was  probably  known  before,  but  when  the  statements 
are  all  put  together  and  we  realize  that  persons  actually  known 
to  members  of  the  class  show  variations  in  industrial  condition 
in  from  fifteen  to  twenty-five  particulars,  these  simple  state- 
ments become  interesting  and  demand  of  us  that  we  try  to  find 
out  why  they  are  true.] 

3.  Compare  all  the  facts  given  about  one  person  with  all 
the  facts  given  about  another  person;  that  is,  read  one 
line  and  compare  carefully  with  another  line,  and  make  other 
statements,  as  in  2,  as  to  differences  in  economic  condition. 

[Note. — Avoid  all  such  general  statements  as  "Those  who 
do  mental  work  get  more  pay  than  those  who  do  manual 
work,"  and  "Janitors  get  less  pay  than  any  other  class  of 
persons."  Such  statements  may  be  true  for  the  persons 
described  in  a  given  diagram,  but  are  these  persons  numerous 
enough  to  warrant  such  sweeping  statements?  Statements 
should  be  made  in  such  a  form  that  they  will  remain  true  no 
matter  how  many  more  cases  may  be  investigated.] 

4.  Make  out  also  a  list  of  questions  suggested  by  the  dia- 
gram, but  not  necessarily  answered  by  it.  Make  this  list  as 
long  and  as  sensible  as  possible.  It  is  surprising  to  see  how 
many  excellent  questions  as  to  causes  and  results  of  the  facts 
shown  on  the  diagram  can  be  asked.  As  many  as  forty  have 
been  made  by  one  class. 


iO  INDUSTRIAL  OBSERVATION 

Lesson  XVIII 

ILLUSTRATIOX    AXD    COMPARISON    OF    PRICES 

"U'e  ai'e  all  familiar  with  the  common  practice  of  comparing 
all  sorts  of  goods  with  one  good  (and  representatives  of  this 
good),  called  money,  to  find  prices.  Whenever  a  person  decides 
npon  the  least  amount  of  money  which  he  will  take  for  a  good, 
there  is  a  case  of  "seller's  price."  Whenever  a  person  decides 
npon  the  largest  amount  of  money  he  will  give  for  the  good  of 
another,  he  furnishes  an  illustration  of  "buyer's  price,"  But 
there  is  another  price  which  is  not  so  well  understood  as  these 
two,  namely,  "market  price";  and,  although  more  will  be  said 
about  price  later,  it  is  possible  to  study  some  examples  here. 

1.  Read  in  the  market  column  of  several  daily  or  weekly 
papers  the  jarices  of  the  goods  or  commodities  most  com- 
monly sold  from  your  locality. 

2.  Make  note  of  the  different  prices  for  the  same  commod- 
ity on  different  dates,  with  reasons  for  the  differences,  if  they 
are  given. 

3.  Ask  men  who  have  commodities  to  sell  what  use  they 
make  of  these  market  i:)rices.  Ask  the  same  question  of 
people  who  wish  to  buy. 

4.  Give  illustrations  of  what  happens  to  commodities  of 
your  locality  when  the  market  prices  have  been  going  up  for 
several  weeks. 

5.  Give  examples  of  the  result  when  prices  have  been 
going  down  for  several  weeks. 

6.  Give  the  names  of  as  many  institutions  as  you  can  which 
"fix"  from  day  to  day  the  market  prices  of  meats,  grains, 
vegetables,  steel,  wool,  cotton,  lumber,  coal,  unskilled  service 
or  labor,  skilled  labor,  etc. 

7.  Show  whether  the  producers  of  some  of  these  goods  are 
helped  or  hindered  in  disposing  of  them,  by  these  institutions. 

8.  Ascertain  if  these  institutions  perform  a  genuine  service 
for  the  buyers  and  sellers.  Decide  whether  or  not  such  insti- 
tutions produce  utility. 


STATISTICS   OF  PERSONAL  CONSUMPTION  41 

9.  Show  that  the  market  prices  of  one  commodity  are  of 
interest  to  producers  over  a  wider  area  than  the  market 
prices  of  another, 

10.  Give  an  example  of  a  commodity  whose  market  price 
affects  the  largest  area  of  producers.  An  example  of  a 
commodity  whose  price  affects  the  smallest  area. 

11.  "What  makes  the  difference? 

12.  How  do  these  market  prices  compare  at  different  times 
\vith  what  buyers  are  ready  to  pay  and  with  what  sellers  are 
ready  to  take;  in  other  Avords,  with  buyers'  and  sellers' 
prices? 

13.  Does  a  sale  at  a  market  price  ever  benefit  both  buyer 
and  seller?     If  so,  how  much?     Explain. 

14.  Suppose  market  prices  are  lower  than  sellers'  prices  for 
several  years  in  succession,  how  does  this  affect  the  amount  of 
the  commodity  produced? 

15.  SupjDOse  the  opposite  is  true,  how  is  the  amount 
affected?    Why? 

Lessoiv'  XIX 

STATISTICS   OF   PEKSOXAL   COXSUMPTIOlSr 

By  means  of  money  it  is  possible  to  compare  roughly  the 
amounts  of  utility  enjoyed  or  consumed  by  different  people. 
Our  own  place  in  the  scale  of  consumers  is  of  special  interest. 

1.  Under  the  headings  given  below,  make  an  estimate  of 
tlie  price  of  goods  consumed  by  you  personally  during  a  year. 
This  report  need  not  be  signed.^ 

a.  Shelter, — rent  of  place  (or  interest  on  value  of 
place  and  furniture,  plus  taxes,  plus  insurance), 
divided  by  the  number  in  the  family. 

b.  Food, — gi'ocery  bill,  plus  meat  bill,  plus  ice  bill, 
etc.,  for  the  year,  divided  by  number  in  the 
family. 

'The  author  is  indebted  to  Mr.  E.  E.  Hill,  of  the  Hyde  Park  High 
School,  Chicago,  Illinois,  for  this  exercise. 


42  INDUSTRIAL  OBSERVATION 

c.  Fuel  and  Light, — total  cost  divided  by  number  in 
the  family. 

d.  Personal  Services,— wages  of  servants  divided  by 
number  in  family,  plus  services  paid  for  private 
teachers,  cost  of  public  school  per  pupil  to  the 
taxpayers,  etc. 

e.  Clothes. 

/.  Recreation  and  sundry  expenses. 
g.  Total. 

2.  Summarize  the  results  for  all  the  members  of  the  class, 
and  find  an  average.     Compare  this  average  with: 

a.  The  prices  of  goods  consumed  by  some  of  the  per- 
sons reported  on  in  diagram  made  as  suggested  in 
Lesson  XVI. 

i.  The  following  statistics  of  income:^ 

INCOME  OF  THE  UNITED'STATES 

FAMILY  INCOME.  NUMBER  OF  FAMILIES. 

$5000  and  over 200,000 

$5000  to  $1200 1,300,000 

Under  $1200 11,000,000 

12,500,000 

c.  The  facts  stated  in  "Hull  House  Maps  and 
Papers,"^  where  many  families  are  represented  as 
getting  less  than  five  dollars  per  week  for  a  family 
of  about  five  persons. 

3.  Find  what  per  cent  the  expenditure  under  each  head  is 
of  the  total,  and  compare  it  with  the  following  statistics 
for  the  United  States  and  for  Europe:'' 

'Spahr,  An  Essay  on  the  Present  Distribution  of  Wealth  in  the 
United  States,  p.  128—1896,  T.  Y.  Crowell  &  Co.,  New  York. 

21895,  T.  Y.  Crowell  &  Co.,  New  York. 

^Bullock,  Introduction  to  the  Study  of  Economics,  pp.  100,  101— 
1897,  Silver,  Burdett  &  Co.,  Boston. 


CONCLUSION 


43 


UNITED  STATES 


Object  of 
expsxditdbe. 


Income 
under 

$200. 


Per  cent. 


Income 

$300 
and  under 

^00. 


Per  cent. 


Income 

$500 
and  under 

$600. 


Per  cent. 


Income 

$700 
and  under 

$soo. 


Per  cent. 


Income 

|90() 
and  under 

§1000. 


Per  cent. 


Income 

$iao(j 

and  over. 


Per  cent. 


Rent 

Fuel 

Lighting 

Clothing 

Food 

All  other  pur-  ) 
poses ) 


15.48 

7.07 

1.01 

12.82 

49.64 

13.98 


1498 

6.04 

.98 

14.14 

45.59 

18.27 


15.15 

5.63 

.97 

15.27 

43.84 

19.14 


15.60 

4.42 

.88 

16.33 

38.89 

23.88 


14.96 

4.00 

.74 

16.84 

34.34 

29.12 


12.59 

2.57 

.45 

15.71 

28.63 

40.05 


EUROPE 


Object  of 
expexditure. 


Eent  

Fuel 

Lighting 

Clothing  

Food  

All  other  purposes 


Income 
under 
$200. 


Per  cent. 


9.38 

5.38 

1.66 

19.08 

48.32 

16.18 


Income 

$300 

and  under 

$400. 


Per  cent. 


11.93 
5.49 
1.59 
14.18 
49.58 
17.23 


Income 

$500 

and  under 


Per  cent. 


10.26 
3.32 
1.37 
15.21 
50.06 
19.78 


Income 

$700 

and  under 

$800. 


Per  cent. 


9.49 

3.97 

1.20 

18.97 

44.00 

22.37 


Income 

$900 
and  under 

$1000. 


Per  cent. 


10.49 

5.19 

1.53 

14.15 

46.24 

22.40 


[XoTE. — Statistics  like  the  above  may  be  made  much  more 
interesting  and  useful  to  the  class  if  several  persons,  perhaps 
all  members  of  the  class,  make  graphic  statements  of  them 
after  their  own  plans  on  ruled  note-paper.] 

Conclusion 

Thus  far  the  observation  and  thought  of  the  student  have 
been  primarily  directed  to  the  various  forms  of  human  activity 
that  are  all  about  him  rather  than  to  printed  accounts  of  these 
activities. 

Human  wants,  ranging  from  the  lowest  physical  to  the 
highest  spiritual  ones,  have  been  pointed  out  as  the  stimuli  of 
human  effort. 

That  quality  in  matter  which  tends  to  satisfy  any  *human 


4.4  INDUSTRIAL   OBSERVATION 

want,  wliether  furnished  directly  by  nature,  or  by  nature 
aided  by  man,  has  been  called  utility. 

Goods  possessing  utility  have  been  grouped  into  two  great 
classes,  services  and^ealth. 

From  an  economic  point  of  view,  the  great  majority  of  men 
and  women  have  been  seen  coming  out  of  an  apparent  chaos  of 
occupations,  to  take  definite  and  orderly  places  in  a  gi'eat 
industrial  organization  whose  perpetual  activity,  from  extractor 
to  servant,  results  in  never-ending  and  reciprocal  streams  of 
utility  for  the  partial  satisfaction  of  their  multiplying  wants. 
From  these  great  streams  of  utility  in  the  forms  of  service  and 
wealth,  the  non-producers  as  well  as  the  producers  take;  but 
to  these  streams,  only  the  producers  give  in  return.  Parasi- 
tism is  not  confined  to  the  vegetable  world.  At  the  best,  a 
producer  is  usually  served  by  a  larger  army  than  the  one  to 
whom  his  product  flows.  t^" 

"If  a  cross  section  showing  a  single  day  in  the  life  of  a  civit-  ^ 
ized  man  could  be  exposed,  it  would  disclose  the  services  of  a 
multitude  of  helpers.  When  he  rises,  a  sponge  is  placed  in 
his  hand  by  a  Pacific  Islander,  a  cake  of  soap  by  a  Frenchman, 
a  rough  towel  by  a  Turk.  His  merino  underwear  he  takes 
from  the  hand  of  a  Spaniard,  his  linen  from  a  Belfast  manu- 
facturer, his  outer  garments  from  a  Birmingham  weaver,  his 
scarf  from  a  French  silk  grower,  his  shoes  from  a  Brazilian 
grazier.  At  breakfast  his  cup  of  coSee  is  poured  by  natives 
of  Java  and  Arabia;  his  rolls  are  passed  by  a  Kansas  farmer, 
his  beefsteak  by  a  Texan  ranchman,  his  orange  by  a  Florida 
negi'O.  He  is  taken  to  the  city  by  descendants  of  James  Watt ; 
his  messages  are  carried  hither  and  thither  by  Edison,  the 
grandson  by  electrical  consanguinity  of  Benjamin  Franklin', 
his  day's  stint  of  work  is  done  for  him  by  a  thousand  Irishmen 
in  his  factory ;  or  he  pleads  in  a  court  which  was  founded  by 
ancient  Romans,  and  for  the  support  of  which  all  citizens  are 
taxed ;  or  in  his  study  at  home  he  reads  books  composed  by 
English  historians  and  French  scientists,  and  which  were 
printed  by  the  typographical  descendants  of  Gutenberg.  In 
the  evening  he  is  entertained  by  German  singers  who  repeat 
the  myths  of  Norsemen,  or  by  a  company  of  actors  who 
render  the  plays  of  Shakespeare ;  and,  finally,  he  is  put  to  bed 
by  South  Americans  who  bring  hair,  bj  Pennsylvania  miners 


CONCLUSION  45 

and  furnace  workers  who  bring  steel,  by  Mississippi  planters 
who  bring  cotton,  or,  if  he  prefers,  by  Eussian  peasants,  who 
bring  flax,  and  by  Labrador  fowlers  who  smooth  his  pillow. 
A  million  men,  women,  and  children  have  been  working  for 
him  that  he  may  have  his  day  of  comfort  and  pleasnre.  In 
retnrn  he  has  contributed  his  mite  to  add  a  unit  to  the  com- 
m.on  stock  of  necessaries  and  luxuries  from  which  the  world 
draws.     Each  is  working  for  all;  all  are  working  for  each."^ 

The  fundamental  importance  of  the  right  of  private  prop- 
erty in  many  things  has  been  emphasized  by  suggesting  that 
the  exercise  of  this  right  is  the  foundation  on  which  the 
present  organization  of  industry  rests. 

The  universality  of  business  bargains,  or  agreements,  called 
contracts,  as  a  means  of  determining  the  economic  relations  of 
men  to  each  other,  has  also  been  clearly  suggested. 

The  following  economic  groups  of  people  have  been  identi- 
fied and  are  all  found  in  most  communities : 

1.  Extractors. 

2.  Transformers. 

3.  Transporters. 

4.  Transferrers. 

5.  Servants. 

6.  Dependents. 

Also,  in  each  concrete  business  enterprise  within  the  first  five 
groups,  the  following  factors  have,  as  a  rule,  been  found  requi- 
site to  the  production  of  utility. 

f  1.  Man. 


I.  The  primary  factors 
(historically  considered).  , 


2.  Natural  resources. 


II.  The  secondary  factor    i 
(derived  from  land,  or  natural  re-    <    3.  Capital, 
sources,  by  man's  previous  effort).  ( 

'Harris,  Moral  Evolution,  pp.  36,  37 — 189G,  Houghton,  Mitllin 
&  Co.,  Boston.  For  a  masterly  description  of  the  process  of  con- 
temporary production,  compare  Taussig,  Wages  and  Capital,  ch.  i 
—1890,  D.  Appleton  &  Co.,  New  York. 


46  INDUSTRIAL  OBSERVATION 

The  persons  who  furnish  these  factors  to  productive  enter- 
prises have  heen  called: 

1.  Undertakers. 

2.  Laborers. 

3.  Capitalists. 

4.  Landlords. 

The  suggestion  has  been  made  that  individual  productive  i 
enterprises,  most  of  the  methods  by  which  different  persons 
are  getting  a  living,  are  more  or  less  modified  by  the  will  of 
society  as  this  will  is  shown  in  fashion,  custom,  usage,  and 
law. 

With  these  economic  facts  and  their  interrelations,  as  the 
student  has  seen  them  and  thought  about  them  in  connection 
with  actual  industrial  processes,  as  clearly  in  mind  as  possible, 
Pai't  II  may  now  be  read.  The  six-fold  grouping  which  has 
become  so  familiar,  the  persons  who  furnish  the  factors  in 
production,  society,  and  the  ideas  of  ownership  and  contract, 
will  be  used  as  general  heads  under  Avhich  to  group  some  of 
the  most  significant  facts  of  more  than  eight  hundred  years  of 
industrial  history.  The  main  question  to  be  answered  is.  How 
have  successive  periods  of  the  life  of  man,  in  England  and  the 
United  States,  differed  from  our  own  period  in  respect  to 
these  economic  groups,  in  respect  to  the  factors  of  production, 
and  in  respect  to  their  ideas  and  practices  concerning  private 
property  and  contract?  How  has  the  industrial  life  of  pre- 
vious periods  differed  from  the  industrial  life  of  the  present? 


—  L' 


PART  II 

OUTLINES    OF    THE    INDUSTRIAL   HISTOEY    OF 
ENGLAND  AND  THE  UNITED  STATES 


Chapter  I 

THE    HOME,  OR    FAMILY,  PERIOD  OF  INDUSTRY  IN    ENGLAND 

Since  the  Conquest,  there  have  been,  in  Eng. 

introduction     ,,,  •     t        ,    •     i  ,-«. 

with  Suggest-  land,  four  ffreat  periods  of  industry  so  different 

ive  Questions.    ,  ^        ,^       \^     ,    ,-,  ^  1 

from  each  other  that  they  have  been  given  dis- 
tinct names.  These  are:  The  Home,  or  Family,  Period;  the 
Gild  Period;  the  Domestic  Period;  and  the  Factory  Period.^ 
The  transforming  group  of  occupations  is  the  one  whose  pecul- 
iarities of  organization  at  different  times  have  suggested  the 
above  names. 

A  chapter  will  be  devoted  to  the  chief  characteristics  of 
industry  as  a  Avhole,  in  each  period. 

1.  Find  out  as  much  as  you  can  about  the  industrial  life  of 
the  time  when  the  old  jieople  you  know  were  children,  and  of 
the  time  when  their  parents  were  children.  For  example, 
get  answers  to  as  many  questions  similar  to  the  following  as 
possible  : 

a.  What  kinds  of  crops  were  raised  on  the  farms,  and 
with  what  tools? 

b.  How  much  of  the  harvest  was  used  at  home,  and 
how  was  the  rest  disposed  of? 

c.  Who  made  the  cloth  and  the  shoes  used  in  the 

'Ashley,  An  Introduction  to  English  Economic  History  and 
Theory,  vol.  II,  .pp.  219,  220— 2d  ed.,  1893,  G.  P.  Putnam's  Sons, 
New  York. 

47 


v 
48  OUTLINES  OF  INDUSTRIAL  HISTORY 

family?    With  what  tools?    Who  furnished   the 
materials? 

d.  How  were  the  persons  paid  who  did  this  work? 

e.  What  journeys  were  taken?  How  did  people  travel? 
What  were  some  of  the  probable  events  of  these 
journeys? 

/.  What  kinds  of  money  were  used?     Was  it  conven- 
ient?    Why? 
g.  How  were  letters,  packages,  and  heavy  goods  sent 

to  distant  persons  and  places?     At  what  cost? 
h.  What  kinds  of  goods  were  sent    long  distances? 

Why? 
I.  How  were  people  amused,   taught,  preached  to, 

and  taken  care  of  when  sick? 
j.  What  were  some  of  the  largest  business  enterprises 

of  the  locality? 
h.  What  prospects  did  young  men  have  of  "setting  up 

in  business"  for  themselves,  becoming  their  own 

undertakers? 
/.  What  capital  was  needed? 

m.   Why  were  boys  apprenticed,  and  how  was  it  done? 
n.  Were  men  who  worked  for  wages  thought  by  their 

employers  to  be  inferior  socially?     Why? 
0.  What    were  the    occupations   of    young  women? 

Why? 
p.  Make  a  list  of  services  that  we  can  buy  now  that 

could  not  be  bought  then. 
q.  Make  a  list  of  potential  utilities,  forms  of  wealth, 

that  we  use  commonly  which  were  then  unknown. 

2.  Write  a  sketch  (partly  imaginary)  of  the  life  of  your 
great-grandfather,  describing  his  food,  clothing,  shelter,  edu- 
cation, travels,  amusements,  occupations,  etc. 

3.  Imagine  your  great-grandmother  a  guest  in  your  hom.e 
for  a  day  or  a  week,  and  write  a  sketch  of  her  experiences  in 
the  midst  of  your  industrial  life  of  production  and  consump- 
tion of  utilities. 


THE  HOME  PERIOD  IN  ENGLAND  49 

4.  Make  a  brief  statement  which  shows  as  clearly  as  possible 
the  great  contrast  between  the  industrial  life  of  to-day  and 
that  of  one  hundred  years  ago. 

When    William    the    Conqueror    (1066-1087) 

Manors  and  i      •  »    -i-,       ^        -,     • 

Towns  in  Eng-  tooK  a  ccusus  of  the  population  of  England,  m 

land  in  1086.     ,^  .  ,  n      -,  -,        ^  • 

1086,  in  order  to  find  out  who  his  taxpayers 
were  and  how  much  his  tax  collectors  ought  to  collect 
from  them,  it  was  found  that  about  ninety  per  cent  of  the 
one  and  one-half  million  people^  were  connected  with  the  occu- 
pation of  agi'iculture  upon  the  various  manors  that  dotted  the 
otherwise  wooded  and  waste  surface  of  England.  About 
eighty  of  these  manors,^  in  addition  to  their  agricultural  popu- 
lation, included  enough  other  peojjle  so  that  they  can  accurately 
be  described  as  towns.  Not  more  than  one-tenth  of  the 
population,  however,  were  found  in  these  overgi-own  manors 
which  were  fortified  and  called  towns.  If,  therefore,  we  can 
get  some  definite  idea  of  a  typical  manor  of  the  time  we  have 
only  to  enlarge  the  picture  and  add  some  details  to  give  an 
idea  of  the  town  also. 

If  an  observer  were  upon  the  top  of  some  high 
View  of  a     hill,  looKiug  dowu  upou  an  old  Enghsh  manor, 

he  would  see  one  straight  street  with  little 
houges  on  each  side  and  a  larger  house  at  one  end  or 
near  by.  Stretching  away  from  this  little  village  would  lie 
ploughed  fields,  each  divided  into  acre,  or  half-acre,  strips, 
usually  forty  rods  long,  by  four,  or  two,  rods  wide,  and  sepa- 
rated from  each  other  by  an  unploughed  "balk"  of  green  turf. 
All  of  the  strips  in  one  field  extend  in  the  same  direction  and 
lie  side  by  side,  but  the  strips  in  adjoining  and  distant  fields 
lie  at  all  angles  with  the  strips  of  the  first  field,  and  the  differ- 
ent fields  are  separated  from  each  other  by  broader  "balks"  of 
turf  that  are  usually  all  overgrown  with  bushes.     The  whole 

'Seebohm,  The  English  Village  Community,  pp.  86,  87,  map — 3d 
eU.,  1884,  Longmans,  Green,  &  Co.,  New  York. 
"Ashley,  vol.  I,  pp.  68,  69. 
•The  same,  vol.  I,  pp.  C,  7.    Compare  Seebohm,  pp.  1-29. 


50  OUTLINES  OF  INDUSTRIAL  HISTORY 

arable  surf  ace  of  the  manor,  therefore,  divided  thus  into  thou- 
sands of  ploughed  strips  grouped  into  separate  unfenced  fields 
at  all  angles  about  the  village  street,  looks  somewhat  like  a  huge 
"spider's  web."  Beyond  the  ploughed  land,  or  along  the 
banks  of  a  stream,  if  one  flows  tlu'ough  the  manor,  are  grass 
lands  for  the  hay  harvest;  further  out  still  is  the  common 
pastm-e  for  the  village  cattle;  and  beyond  all  else  is  the  forest, 
into  which  the  swine  are  di'iven  to  feed  upon  the  roots  and 
nuts,  and  which  stretches  far  and  dark  and  isolating  toward 
other  manors  that  lie  scattered  here  and  there  in  the  immense 
waste  of  moor,  fen,  and  wood  which  make  up  the  England 
of  King  William's  time. 

Now  the  explanation  of  this  bu'd's-eye  view  of 

Explanation  .         .         , 

of  a  manor  lies  m  the  relation  of  its  inhabitants 

the  View.' 

to  each  other  and  to  the  soil.  The  little  cot- 
tages along  the  two  sides  of  the  straight  street  are  the 
homes  of  the  tenants,  while  the  larger  house  near  one 
end  of  the  street  is  the  manor  house  in  which  the  lord  of  the 
manor,  or  his  representative,  lives.  The  numerous  fields  of 
long  and  narrow  acre,  or  half-acre,  strips,  are  the  cultivated 
land  which  is  divided  among  the  tenants  and  the  lord  in  a 
curious  way.     For  example,  if  the  names  of  the  tenants  are 

A,  B,  C,  D,  E,  F,  etc.,  the  strips  of  each  field  belong  to  A, 

B,  C,  D,  E,  F,  etc. ;  but  often  not  more  than  one  strip  in  a 
place  belongs  to  the  same  tenant.  The  lord  also,  in  addition  to 
the  solid  acreage  of  land  about  the  manor  house,  often  holds 
single  strips  of  land  scattered  over  all  the  various  fields  of  the 
manor,  side  by  side  with  the  strips  of  his  tenants.  The  grass 
land  by  the  riverside  is  also  divided  into  as  many  plots  as 
there  are  tenants.  The  pasture  and  forest  on  the  outside  of 
the  ploughed  land  are  used,  as  a  rule,  by  lord  and  tenants  in 
common,  and  are  not  divided.  The  lord's  lands  are  called  the 
"demesne  lands,"  and  the  ploughed  fields  with  their  strips 
running  in  all  directions  are  the  "open  fields." 

'Authority  for  the  historical  statements  of  this  chapter,  unless 
otherwise  stated,  may  be  found  in  Seebohm  and  Ashley. 


THE  HOME  PERIOD  IN  ENGLAND  51 

The  farmers   of    this  day   were  not    very    fa- 

The  Method  .  ,  .   ,         ,  ...  "^ 

of  miliar  with   the  art  of  fertihzation  of  the  soil 

Cultivation.! 

and,  of  course,  knew  nothing  of  agricultural 
chemistry,  so  they  used  to  let  their  fields  rest — "lie  fallow," 
a  part  of  the  time.  Sometimes  they  let  a  field  lie  fallow 
one  year  and  cultivated  it  the  nest,  which  gave  them 
the  use  of  only  half  the  ploughed  land  each  year.  This 
was  the  "two  field  system."  Again,  they  sowed  a  field  for 
two  years  in  succession  and  let  it  rest  the  third,  thus  having; 
in  use  each  year  two-thirds  of  all  the  ploughed  land.  This 
was  called  the  "three_fleld_sjstem." 

By  either  system  the  land  was  not  economically  used  and  no 
man  could  cultivate  his  strips  in  a  different  way  from  that  of 
his  neighbors.  The  whole  community  was  bound  in  the 
bonds  of  a  common  method  of  agriculture.  No  ambitious 
tenant  could,  without  the  consent  of  his  neighbors,  improve 
the  crop  and  method  of  cultivation  of  his  particular  strips, 
because  the  cattle  were  allowed  to  graze  over  all  the  arable 
land  of  the  manor  that  was  lying  fallow,  and  even  upon  the 
rest  of  it  in  the  autumn,  after  the  harvest  had  been  gathered. 
The  careless  farmer  was  able,  by  virtue  of  his  scattered  hold- 
ings, to  sow  the  fields  of  the  whole  manor,  including  those  of 
the  lord,  with  seeds  of  noxious-Wejeda ;  and  the  quarrelsome 
man  was  able,  by  virtue  of  the  same  peculiarity  of  holding 
land,  to  keep  up  a  perpetual  dispute  with  many  neighbors  over 
real  or  alleged  encroachment  upon  the  turf  divisions  between 
holdings,  about  right  of  way  along  the  headlands,  and  about 
paths  made  through  the  growing  grain. 

The  origin  of  this  scattered  strip  system  of  holding  and 
working  land  is  variously  explained,  but  probably  was  due  to  the 
fact  tliat  once  the  lands  of  tlie  community  were  periodically, 
perhaps  annually,  assigned  to  the  individual  members,  each 
person  getting  strips  in  all  parts  of  the  cultivated  area,  in  order 
to  give  to  all  the  benefits  of  each  specially  fertile   section. 

'Cunningham  and  McArthur,  Outlines  of  English  Industrial 
Ilintory,  pp.  172-174—1895,  The  Macmillan  Co.,  Now  York. 


^ 


ty^ 


53  OUTLINES  OF  INDUSTRIAL  HISTORY 

When  the  periodical  assignment  was  given  up  and  the  same 
strips  were  occupied  year  after  year  by  the  same  man,  and 
perhaps  by  liis  son  after  him,  the  land  of  each  man  became 
permanently  but  definitely  scattered.  AVhatever  the  origin, 
this  was  the  universal  system  of  landholding  at  the  time  of 
Domesday  Survey;  and,  what  is  still  more  remarkable,  the 
system  was  not  wholly  given  up  until  the  nineteenth  century 
was  well  begun. 

Although   there   were   various   classes   of   ten- 
of  ants    upon   these   manors     ranging  from    men 

Tenants.'  ,  ^  .       ,  -.in 

who  were  nearly  freemen  in  the  modern  sense 
of  the  word,  to  others  who  were  little  more  than  slaves; 
the  most  numerous  class  was  composed  of  "villeins"  who 
were  about  midway  between  slavery  and  real  freedom.  Most 
of  the  tenants  who  were  the  nearest  free  were  upon  the 
manors  in  the  Danish  counties  of  northeastern  England.  The 
names  "socmen"  and  "freemen"  were  often  applied  to  them. 
Most  of  the  "servi,"  or  slaves,  were  found  in  the  southwestern 
manors.  There  were  also  many  "bordars,"  or  "cotters,"  who 
held  less  land  than  the  villein  on  similar  conditions. 

The  typical  villein  held  fifteen  or  thirty  acres  of  ploughed 
land,  called  a  half-vu'gate  or  a  virgate,  scattered  as  we  have 
seen  in  strips  all  over  the  manor.  He  also  had  a  little  cottage, 
usually  with  a  garden,  on  the  village  street ;  an  allotment  of 
grass  land  sufficient  to  cut  hay  enough  to  feed  his  cattle 
during  the  winter;  the  right  to  pasture  a  certain  number  of 
cattle  upon  the  common  pasture  during  the  summer ;  and  the 
right  finally  to  let  his  swine  feed  in  the  surrounding  forest, 
from  which  he  could  also  collect  the  necessary  firewood. 
The  Conditions  ^*^-  '^^^^  '' HeHot.'''' — It  will  bc  remembered  that 
"^thexxnein  William  I.  was  a  feudal  monarch,  and  after 
Held  His  Land,  ^j^^  Conquest  claimed  jurisdiction  over  all  the 
land  of  England.  Some  of  it,  although  containing  manors 
and  towns,  he  laid   waste  to   make  for   himself  a  mighty 

Winogradoff,   Villeinage  in  England,  pp.  132,  177,  220—1893,  The 
Clarendon  Press,  London. 


THE  HOME  PERIOD  IN  ENGLAND  53 

hunting  ground;  some  of  its  manors  he  cultivated  him- 
self after  the  methods  of  that  day;  while  other  manors 
were  allotted  to  his  followers,  one  or  more  to  each  per- 
son, on  condition  of  their  giving  him  military  service 
and  other  payments  in  return.  The  inhabitants  of  each 
manor  were  in  turn  expected  to  render  the  lord  of  the 
manor  certain  services  and  make  certain  payments,  in  return 
for  protection  and  the  right  to  cultivate  their  various  hold- 
ings. The  most  important  person  connected  with  each 
manor,  therefore,  was  the  lord,  whether  this  was  the  king 
himself,  as  in  the  case  of  the  1,422  manors  held  directly  by 
William  in  1086,  or  some  follower  of  the  king  as  upon  other 
manors. 

The  villein,  therefore,  was  not  the  full  owner  of  his  laud, 
but  held  it  upon  a  grant  from  the  lord  of  the  manor,  some- 
times for  life  and  sometimes  for  a  term  of  years,  in  accordance 
with  the  custom  of  the  manor  for  that  pai'ticular  holding. 
When  this  grant  expired  the  title  reverted  to  the  lord,  who 
could,  in  theory  perhaps,  regrant  it  to  whom  he  would.  In 
practice,  however,  the  holding  was  usually  regranted  undivided 
to  the  tenant  himself,  and,  when  he  died,  to  his  eldest  son. 
This  regrant  was  usually  conditioned  upon  the  payment  to  the 
lord  of  a  "heriot,"  or  "relief,"  consisting  of  an  ox,  the 
money  value  of  the  same,  or  some  other  similar  payment. 

It  will  be  observed  that  this  payment,  which  was  of  the 
nature  of  an  inheritance  tax,  did  not  give  the  villein  power  to 
sublet  his  holding  without  the  lord's  permission,  much  less  to 
dispose  of  it  absolutely  by  gift,  by  sale,  or  by  bequest.  What 
the  villein  obtained  was  simply  the  right  to  make  use  of  land 
in  his  own  person. 

b.  Weekly  Work:  '^Precarice,^'' or '■'■Boon-days'''':  Payments 
in  Kind  or  in  Money. — The  following  minute  record  of  the 
services  of  two  villeins  in  the  thirteenth  century  is  given 
by  Mr.  Seebohm,  and  quoted  here  in  full  in  order  to  show 
how  detailed  the  duties  of  a  villein  were.^ 

'  pp.  42,  43.  ' 


54 


OUTLINES  OF  INDUSTRIAL  HISTORY 


EXAMPLES    OF   VILLEIN    SERVICES 


Oxfordshire 

Of  a  villanus  holding  a 
virgate. 

A.  B.  holds  a  virgate  and 
owes — 

82   days'  work  (about  2 
days  a  week)  between 
Michaelmas  and  June  s.    d. 
24,  valued  at  Kd.=  ...   3    5 

113^  days'  work  (rather 
more  than  2  days  a 
week)  between  June 
24  and  August  1,  val- 
ued at  Id.  = llj^ 

19  days'  work  (2J^  days 
a  week)  between  Au- 
gust 1  and  Michaelmas, 
valued  at  l>.^d.= 2    4K 

6  precariae,  with  one 
man,  valued  at 12 

1  precaria,  with  2  men, 
for  reaping,  with  food 
from  the  lord,  valued 
at 2 

Half  a  carriage  for  car- 
rying the  wheat 1 

Half  a  carriage  for  the 
hay I 

The  i^loughing  and  har- 
rowing of  an  acre 6 

1  ploughing  called  "gro- 
serthe" 13^ 

1  day's  harrowing  of  oat 
(land) 1 

1  horse  (load)  of  wood...  >.< 

Making  one  quarter  of 
malt  and  drying  it 1 

1  day's  work  at  washing 
and  shearing  sheep, 
valued  at K 

1  day's  hoeing }>i 


Huntingdonshire 

Of  a  villanus  holding  a  virgate. 

A.  B.  holds  1  virgate  in  villeinage — 

By  paying  12d.  at  Michaelmas. 

By  doing  works  from  Michaelmas 
to  Easter  with  the  exception  of 
the  fortnight  after  Christmas, 
viz.,  2  days  each  week,  with 
one  man  each  day. 

Item,  he  shall  plough  with  his 
own  plough  one  selion  and  a 
half  on  every  Friday  in  the 
aforesaid  time. 

Item,  he  shall  harrow  the  same 
day  as  much  as  he  has  ploughed. 

He  shall  do  works  from  Easter  to 
Pentecost  2  days  each  week, 
with  one  man  each  day. 

And  he  shall  plough  one  selion 
each  Friday  in  the  same  time. 

He  shall  do  works  from  Pentecost 
till  August  1,  for  three  days 
each  week  with  one  man  each 
day,  either  hoeing  the  corn,  or 
mowing  and  lifting  (levand). 

He  shall  do  works  from  August  1 
till  September  8,  for  3  days  each 
week,  with  two  men  each  day. 

He  shall  make  one  "love  bonum" 
with  all  his  family  except  his 
wife,  finding  his  own  food,  and 
from  September  8  to  Michael- 
mas he  works  3  days  each  week 
with  one  man  each  day. 

He  shall  carry  (with  a  horse  or 
horses)  as  far  as  Bolnhurst,  and 
from  Bolnhurst  to  Torneye. 
Also  he  gives  J^  bushel  of  corn  as 

"bensed"  in  winter  time. 
Also  10  bushels  of  oats  at  Martin- 
mas as  "fodder-korn." 


THE  HOME  PERIOD  IN  ENGLAND 


55 


s.     d. 

3  days"  mowing 6 

1  day's  nutting J^ 

1  day's  woi"k  in  carrying 

to  the  stack }4 

Tallage  once  a  year  at 

the  lord's  will. 


AlsoTd.  as  "loksilver,"  that  is  for 

2d.  a  loaf  and  5  hens. 
Also  Id.  on  Ash  Wednesday,  as 

"fispeni"  (fishpenny). 
Also  20  eggs  at  Easter. 
Also  10  eggs  on  St.  Botolph's  Day 

(June  17). 
Also  in  Easter  week  2d.  towards 

digging  the  vineyard. 
Also     in     Pentecost     week     Id. 

towards  upholding  the  milldam 

(stagnum)  of  Newstone. 
If  he  sell  a  bull  calf  he  shall  give 

the  lord  abbot  4d.  and  this  ac- 
cording to  custom. 
He  gives  "merchetum"  and  "heri- 

etum"     and     is     tallaged     at 

Michaelmas    according    to    the 

will  of  the  said  abbot. 
He  gives  2d.  as  "sumewode  silver" 

at  Christmas.  ^,  . 


>, 


The  VUlein 
a  Serf. 


;^ 


If  the  foregoing  account  of  villeins'  servicei 
and  payments  to  their  lords  be  typical,  as^^y^ 
there  is  no  doubt  they  are,  it  can  be  seen  at  once  ho\^ 
servile  their  position  was.  Obliged  to  make  a  payment^j^^^^^^^ 
in  order  to  come  into  possession  of  a  virgate  or  half- /^  ^ 
virgate  to  begin  with,  the  villein  was  henceforth  unable  to 
leave  the  manor,  to  sell  an  animal,  or  to  give  his  daughter 
in  niJirriage,  without  gaining  the  consent  of  his  lord,  and, 
usually,  paying  some  fine.  After  devoting  from  two  to 
three  or  more  days  per  week  throughout  the  year,  and  extra 
days,  sometimes  with  an  extra  man  or  two,  at  harvest  and  other 
times  of  extra  need,  to  the  service  of  his  lord,  the  time  that 
was  left  could  be  given  to  the  cultivation  of  his  own  virgate 
in  order  to  gain  his  own  subsistence  and  the  wherewithal  to 
pay  the  further  taxes  due  the  lord  by  custom  or  exacted  at 
his  caprice.  Such  was  the  typical  condition  of  the  vil- 
leins mentioned  in  the  Domesday  Survey  of  William  the 
Conqueror. 


56  OUTLINES  OF  INDUSTRIAL   HISTORY 

It   has  already  been  stated   that  the  kiiif;   at 

The  Seneschal     .        ,.  «    ,1       o  ,1         t  ,       , 

or  the  time  of  the  burvey  was  the  direct  lord  of 

steward.  -,■,,•  .  ^ 

many  manors;  and  that  m  certain  other  cases 
several  manors  were  gi'anted  to  one  person.     In  these  cases, 
of  course,  the  lord  could  not  give  adequate  personal  super- 
intendence to  all  his  estate,  especially  as  it  was  the   policy 
of  the  Conqueror  to  give  to  one  man  the  lordship  of  manors 
in   different    parts    of    England,    rather    than    in  a  group, 
M     Therefore,  the  services  of  a  general  superintendent  of  several 
,j/^    I  manors^  was   performed    for   the  lord   by   a  "seneschal"  or 
p'  1  "steward."     It  was  his  duty  to  settle  all  questions  of  rents, 
'*^  '       'services,  markets,  seed  for  the  different  manors,  etc.     He  per- 
formed these  duties,  partly  by  overseeing  the  work  of  the  lord's 
agent  on  each  manor,  and  partly  by  holding  the  manorial  courts. 
The  local  agent  of   the  lord   for    each  manor 
■1 C  and  was  tliej_' bailiff"  who  was  to  look  after  thejord's 

)jj^^fipfy  '       interest  in  every  detail ;  for  example,  he  was  to 

J^f  see  to  it  tlmtjh^^iyillein^^mt in  a  good  day's  work,  worked  the 
required  number  of  days  weekly,  and  gave  his  boon-day  service  at 
the  right  time.     He  inspected  the  woods,  pastures,  and  fields, 
and  directed  in  detail  all  the  work  on  the  lord's  demesne. 
/        Under  the  bailiff  was  the  "prgepositus"  or  "reeve,"  who  wa^' 
L>^  iLelected  by  the  other  tenants  and  who  saw  to  it  in  general  that 
Jr^      the  villeins  did  their  customary  work  well.     It  must  be  sup- 
posed also  that  he,  to  a  certain  extent,  took  the  part  of  the 
tenants  if  there  was  danger  of  their  being  unjustly  treated. 
f     Thus,    under   the   eyes   of   the  lord's    trusted    men,   the 
Ivilleins  joined  their  oxen  for  ploughing  the  scattered  strips  o'f 
the   lord's    demesne;    sowed,   cultivated,  and   harvested  the 
lord's  grain;  cut  his  hay  from  the  common  meadow;   and 
hauled  firewood  from  the  forest  to  the  manor  house. 

Not  only  was  the  extractive  group  of  occupa- 

dustrie" mher  ^^ons  of  morc  industrial  importance  than  all  the 

^cufta«f''     other  occupations  of  the  time;  but  agriculture, 

according  to  the  methods  described,  was  theffliost 

important    of    the  extractive   industries.     Even  the  inhabit- 


^6 


THE  HOME  PERIOD  IN  ENGLAND  57 

ants^  ol_jthe^  Jargesttow^nj^  were  many  of  tlieni  holders^ 
and  cultivators  of  scattered  strips  of  land  outside  the  town 
walls.*  At  first  many  townsmen  even  gave  weekly  and  boon- 
day  labor  on  the  lord's  demesne  lands  in  return  for  their  own 
holdings,  since  every  town  belonged  to  some  lord's  estate  just 
as  if  it  were  only  a  manor. 

In  comparison  with  agriculture,  therefore,  the  other  extract-  ^  (U^(ji 
ive  industries  amounted  to  little.     Some   tin  was  mined  in  1  £?T?^ 
CornjEalL  and  the  Scilly  Isles,  a  little_lead^in_Derbyshii'e ;  1    •• 
and  coal  was  picked  up   in   many   places.     Such   primitive    -^^'^'^^-*< 
methods  prevailed  that  man  was  practically  helpless  in  his 
attempts   to   assault   the  mineral  stores   of  the  island.     Of 
course,  many  persons  fished  a  little,  some  hunted,  and  every- 
body secured  firewood  and  rudeJbimbers  from  the  extensive  and 
isolating  forests  about  them. 

The  tenants  of  a  manor  built  their  own  rude  \ 

Transforming  »      i     •      ^i i t    1 

upon  the      dwelliugs,  drigd  the  skms  of  their-  slaughtered 
animals   for   their   own  use,   and  wove  rough  I 
linen   and  woolen   cloth  from  which  they  made  their  own 
simple    clothes.      There   was    also   a    smith  who   kept  the  I 
ironwork   of   the  village   ploughs  in  order,!  and  a  carpenter 
who  made  and  repaired  the  woodwork  of  ploughs/ harrows, 
etc.     These  men  were  themselves  often  tenant  fai-mers  who 
were  excused  fi-om  a  part  of  their  labor  for  the  lord,  in  return 
for  their  services  as  artisans.     When  several  manors  were  closer  . 
together  a  smith  and  a  carpenter,  working  now  in  one  manor i^ 
and  now  in  another,  were  sometimes  kept  wholly  at  transform- 
ing work,  and  thus  were  distinct  from  the  extractive  class  of 
workers.     As_a_j:ulej_Jiowever,jyie_trgji^^  of   a 

manor  was  done  by  the  extractors.     Extracting  and  transform- 
ing were  not  yet,  as  a  rule,  distinct  occupations.     There  wasfi 
practically    no    manufacture    for    consumption    outside    the|\ 

manor.  ' 

U 

'Gomme,    The    Village    Community,    p.    226 — 1890,   Scribner   & 
Wei  ford,  New  York. 


68  OUTLINES  OF  INDUSTRIAL  HISTORY 

Transformers  ^^  ^^^^^   S^^^  larger,  and   needed   manufac- 
in  tured     ai'ticles    requiring    more   skill    than    a 

Towns.'  person  occupied  most  of  the  time  with  other 
tasks  could  acquire,  distinct  artisan  classes  with  superior 
tools  grew  up  in  the  town  to  make  such  articles.  Probably 
the  first  transforming  industry  to  enlist  in  its  services 
the  whole  time  of  a  separate  class  of  men  was  that  of 
// /  ■\veaying.  Cloth  was  "a  necessary,"  but  a  necessary  which 
would  "keep."  So  this  industry  grew  as  town  populations 
grew,  and  many  other  industries  likewise,  and  gradually 
absorbed  to  themselves  the  whole  time  of  larger  and  larger 
numbers  of  men.  Among  industries  mentioned  by  Ashley  are 
those  of  butchers,  bakers,  bricklayers,  cordwainers_,  d^;ers, 
fullers,  saddlers,  helmet-makers,  spurriers,  plumbers,  etc.  In 
towns,  therefore,  there  was  already  a  distinct  and  growing 
group  of  transformers ;  although  it  must  be  supposed  that  in 
the  town,  as  well  as  upon  the  manor,  most  of  the  manu- 
factured goods  required  by  each  household  were  still  made 
by  its  own  members. 

With  the  exception  of  couriers,  messengers,  etc.. 

Transporters.    , .  .  /  ,  ,      t    , .       ,     « 

this  gi'oup  of  men  was  not  yet  distinct  from 
extractors  and  transformers  on  one  side,  or  from  transferrers  on 
the  other.  About  the  only  commodities  that  were  carried  out  of 
a  manor  were  the  agricultural  products  which  were  drawii_aJLd 
carried  by  tenants  themselves  to  the  nearest  market  town,  to  a 
fair,  or  to  some  other  manor  house  where  their  lord  and  his 
retinue  were  for  a  brief  time  staying.  On  the  other  hand,  the 
goods  that  were  brought  into  towns  and  manors  were  chiefly  a 
few  articles  of  luxury  from  abroad,  articles  that  were  not  bulky, 
but  valuable. 

The  only  vehicles  were  rude  and  heavy  w_agmia-  for 
merchandise^-  Men  and  women  went  on  foot  or  on  horse- 
back. With  the  exception  of  some  old  Eoman  roads  which 
still  remained,  the  highways  were  wretch^  and  Rowing 
worse. 

'Ashley,  vol.  II,  ch.  i. 


THE  HOME  PERIOD  IN  ENGLAND  59 

The  first  sroup  of  occupations,  aside  from  the 

Transferrers.'  o         j.  r  i 

military,  to  become  wholly  separate  from  agri- 
culture, was  probably  a  class  of  small  traders  in  raw  products 
of  agriculture,  and  imported  ai'ticles  of  luxury.  After  the 
Conquest  this  foreign  trade,  largely  in  the  hands  of  men  fi-om 
outside  England,  grew  in  importance  and  was  cai'ried  on 
mostly  in  the  market  places  of  towns  and  at  periodical  fans.  It 
was  necessary  to  gain  the  king's  consent  for  a  town  to  have  a 
market  and  for  the  holding  of  all  fairs.  Money  wasjicaxce, 
and  most  exchanges,  especially  the  local  exchanges,  were  of 
goods  for  goods  (barter)  at  rates  that  were  largely  ruled  by 
custom. 

As  both  local  and  foreign  trade  grew,  a  town  got 
permission  from  the  king  to  form  an  organization  of 
privileged  men  called  a  **Gild  Merchant,"  to  control  the 
minutest  details  of  the  qualities  and  quantities  of  goods 
exchanged.  Within  a  century  and  a  half  after  the  Con- 
quest practically  every  town  of  importance  had  secured  the 
privilege  of  thus  controlling  its  own  trade  by  means  of  its  Gild 
Merchant. 

,  The  lord  of  a  manor,  the  king,  and  the  neces- 

Servants.     \>  —       .  .       — ;      ° 

, '  sary  retainers  of  both,  in  this  feudal  time  when 
an  armed  force  was  needed  for  offense  and  defense,  performed  .y^^-i 
genuine  services  for  the  manorial  tenantry  in  return  for  the 
servile  and  oftentimes  excessive  labor  and  contributions  rendered 
to  their  lords  by  the  tenants.  Courts  were  also  held  by  the 
lords,  or  their  representatives,  upon  every  manor. 

Sometimes,  also,  the  lord  of  a  manor  was  not  a  military  or  a,£^ . 
political  person,  but  a  church  dignitai-y,  and  thus  rendered  a  ' 
r el igiou^^ervice  to  his  tenantry.  In  addition,  there  was  upon 
each  manor,  as  a  rule,  a  village  priest  who  often  united  in  him- 
self the  functions  of  farmer,  teacher,  and  preacher.  In 
genera],  clergymen  were  lawyers,  teachers,  architects,  and  men 
of  letters. 

'Gross,  The  Gild  Merchant,  vol.  1—1890,  The  Clarendon  Press, 
LJondon. 


60  OUTLINES  OF  INDUSTRIAL  HISTORY 

Of  course,  there  were  also  personal  and  domestic  servants  in 
the  service  of  the  well-to-do. 

Two  facts  should  be  emphasized :  the  servant  group  of  occu- 
pations was  not  so  separate  from  other  groups  as  now,  since 
each  man  did  a  greater  variety  of  kinds  of  work ;  services  of 
all  sorts  were  not,  as  a  rule,  paid  for  in  money,  but  in  other 
services  or  material  goods.  Much  of  the  income,  even  of 
the  clergy,  lords,  and  kings,  was  in  the  form  of  services 
and  produce  rather  than  in  money.  The  feudal  system 
as  a  whole  was  based  more  upon  the  idea  of  an  exchange  of 
services  than  of  wealth. 

Dependents.'  "^^^^  ^^^^  ^^^^  ^^^  ^^®  land  and  all  the  persons 
upon  all  the  land  were  a  part  of  the  estate  of 
some  lord,  fixed  the  responsibility  for  caring  for  all  unfortunate 
and  inefficient  persons.  With  the  possible  exception  of  the 
useless  hangers-on  of  the  powerful,  and  of  the  begging  friars 
who  entered  England  early  in  the  thirteenth  centm-y,  there 
were  no  homeless  poor  in  England.  Each  manorial  estate  was 
supposed  to  take.cai-e  of  all  its  own  dependents. 

Society.''  "^^^  dominant  idea  upon  manor  and  in  town  was 
what  we  call  feudalism.  There  were  graded 
rights  to  the  soil ;  and  gi-aded  duties  corresponded  with  those 
rights.  Every  person,  therefore,  had  well-defined  rights_and 
duties  in  relation  both  to  those  persons  higher  in  the  scale  and 
to  those  lower.  Looking  at  society  from  the  point  of  view  of 
the  king,  it  is  clear  that  from  the  humblest  tenant  who  gave 
days  of  service  and  a  few  eggs  to  the  lord  of  the  manor,  up 

^Garnier,  History  of  the  English  Landed  Interest,  vol.  I,  p.  245— 
1892,  Swan,  Sonnenscliein,  &  Co. ,  London. 
^In  Part  I  we  used  the  formula — 

Soeiety  +  man]  -  rrecfed  ™te  [  +  »^P'" 

-f-  natural  resources  =  utility 
to  summarize  the  so-called  '"factors"  that  are  present  in  every  pro- 
ductive enterprise.     The  terms  of  this  formula  will  be  here  used  to 
summarize  some  of  the  facts  of  productive  enterprises  of  England 
dm-ing  the  Home  Period. 


THE  HOME  PERIOD   IN   ENGLAND  61 

through  the  villeins,  socmon,  lords,  abbots,  and  over -lords,  an 
increasing  stream  of  revenne  was  flowing  toward  the  king  as 
the  official  head  of  the  political  and  military  society  of  Eng-  (j^y* 
land.     The  king  also  gained  much  revenue  from  the  great  / 
number  of  royal  manors  of  which  he  was  the  direct  lord. 

Through  taxation  by  feudal  methodsj^  therefore,  the  pro- 
ductive processes  of  individuals,  then  as  well  as  now,  were 
affected  by  society  organized  for  purposes  of  government. 

xVnother  way  in  which  the  king,  in  the  name  of  all  the  peo-  j^^  ^ 
pie,  affected  industry,  was  in  partially  controlling  the  coinage         •  ^^ 
of  money.     Henry  I.  (1100-1135)  found,  in  1135,  that  ninety-  ^""^ 
four  "moneyers"  who  had  been  allowed  to  coin  money  had 
clipped  the  coins.     As  a  punishment  he  ordered  their  bodies 
to  be  likewise  mutilated. 

A  third  important  power  of  society  was  the  minute  control  ,  U^ 
of  trade  and  transportation  by  the  ]\Ierchant  Gilds  of  towns  to  Jhfi^>^ 
which  the  king  had  granted  this  privilege.  The  right  to  hold  '-"j.  ^ 
fail's  was  also  bought  from  the  king.  ,  "^Tl^  ^^ 

Towns  similarly  bought  from  their  lords  the_right^to  pay  a^'^        '' 
town  tax  instead  of  giving  individual  servicesj^the  right  to 
govern  themselves,  mi rr jhborigbt  t.n_Iui1d  p.onrts.     Thus  men 
in  groups  to  whom  we  give  the  name  society,  through  their       ^^ 
(£./ political ^nd  military  organization  as  a^  nation,  throug'lrilieii:[  ^^,   L^ 
''     town  organizations ,  and  through'^ their  industrial  gilds,  were  C<A^«t^ 


continually  making  rules  and  conditions  under  which  the  indi-{ 

vidual  producer  of  utility  was  obliged  to  carry  on  his  enterprise. 

Political  economists  mean  by  ''land,"  not  only 

Landlords.  ''  <^        T"  .         '' 

land  in  the  literal  sense,  but  also  lakes,  rivers, 
mines,  forests — all  kinds  of  materials^^-giid  forces  whatsoever 
that  are  furnished  directly  by  nature.  We  shall  often  use 
the  word  land  in  this  broad  sense  hereafter. 

The Jdiig-3£a^  th^^greatest  landowner  in  England.*  Indeed, 
in  theory,  he  was  the  only  man  who  had  the  full  right  of 
private  property  in  land, — right  to  use  in  his  own  person,  right 

'' Medley,  A  Student's  Manual  of  Constitutional  History,  \>.  20— 
1894,  Simkins,  Marshall,  Hamilton,  Kent,  &  Co.,  London. 


63  OUTLINES  OF  INDUSTRIAL  HISTORY 

to  let  out  and  enjoy  the  fruits  of,  and  right  to  dispose  of. 
Other  men,  down  to  the  villein  who  had  simply  the  right  to 
l^se,  hacl^artial  rights  of  property.  Slaves,  of  course,  did  not 
have  even  this  partial  ownership.  Still,  one  of  the  most 
significant  things  about  the  time  was  that  nearly  everybody 
had  at  least  the  right  to  use  for  a  definite  period  a  definite 
amount  of  land.  Nearly  everybody  was  in  a  limited  sense  his 
own  landlord. 
/^      ,    .  The  term  "capital"  as  used  hereafter  is  intended 

Capitallsta.'  .      i     t     i       , 

to  include  both  money  and  all  goods  not  designed 
by  the  owner  for  the  immediate  satisfaction  of  his  wants,  but 
for  use  in  further  production,  that  is,  all  "tangible  apparatus^ 
for  the  production  of  wealth."^  /The  term  includes  also  "all 
the  goods  still  in  the  stage  preparat^ory  to  final  enjoyment."/ 

In  a  certain  sense,  of  course,  any  man  who  has  even  a  little 
capital  is  a  capitalist,  but  generally  a  capitalist  means  a  man 
who  has  a  considerable  quantity  of  capital,  usually  enough  to 
lend  to  others. 

In  this  sense  there  were  comparatively  few  capitalists  in 
England.  The  workmen  in  the  different  occupations,  of 
course,  had  simple  tools  belonging  either  to  themselves,  to  the 
lord  of  the  manor,  or,  in  towns,  sometimes  to  the  master 
workman.  Still  no  great  outlay  was  necessary  for  tools  in 
any  particular  case.  Skill  in  their  use  was  more  important 
in  setting  up  a  business  than  the  tools  themselves.  The  labor 
factor  in  production  was  of  more  importance  than  the  capital 
factor. 

Man  as  Under- %  "undertaker"  is  meant  the  man  who  sees 
taker.  ^]^^^^  some  utility  is  desired  by  men  and  under- 
takes the  task  of  producing  it.  Here  again  every  case  of 
production  has  its  undertaker ;  but  there  are  cases  varying  all 
the  way  from  the  one  where  no  special  acuteness  is  required  to 
see  what  kind  of  utility  will  meet  the  wants  of  men,  to  the 

'  See  Part  III,  chapter  ii,  for  brief  discussion  of   the  nature  of 
capital. 
"Taussig,  pp.  36,  37. 


THE  HOME  PERIOD  IN  ENGLAND  63 

</ one  where  a  man  must  foresee,  montlis  in  adv;tnce,  what  par- 
ticnlar  textures  and  patterns  of  fabrics  fashion  will  make 
populai'  among  millions  of  people.  Cases  vai'y  also  from  a 
simple  productive  process  where  the  undertaker  himself  can  j 
with  his  own  hands  use  the  necessary  tools  upon  simple 
materials,  to  the  case  where  the  cooperation  of  thousands  of 
laborers,  millions  of  dollars'  worth  of  capital,  and  other 
millions  of  dollars'  worth  of  land  must  be  secured.  Only 
when  the  productive  process  has  become  so  complex  that 
special  acuteness  in  planning  a  business  and  special  skill  in 
the  cooperation  of  land,  labor,  and  capijtal.to  carry  it  on  suc- 
cessfully, are  required,  is  there  a  class  of  people  developed  to 
do  just  this  work. 

During  the  Home  Period  of  industry,  production  was  simple 
and  cai'ried  on  in  customary  ways.  The  undertaker,  there- 
fore, does  not  stand  out  separate  from  ordinary  workmen  or 
from  owners  of  land. 

Man  as  Direct- ^^P^^  ^^®  mauors  the  tenants  worked  in  two 
ed Worker,  capacities:  as'^dhected  workers  upon  the  lord's 
demesne  lands ;  and  as  independent  workers,  men  who  were 
their  own  undertakers,  upon  their  own  holdings.  There  were 
also  beginnings  of  wage  work  in  the  modern  sense.  For 
example,  when  the  villein  was  obliged  to  work  for  the  lord 
with  one  or  two  men,  there  was  something  similar  to  our 
wage-work,  although  at  fii-st,  no  doubt,  the  cotter  who  worked 
for  tlie  villein  in  this  Avay  was  jiaid  partly  in  produce  or 
reciprocal  labor;  and,  besides,  he  was  usually  a  small  farmer  on 
his  own  account,  and  thus  not  wholly  dependent  upon  wages. 
In  towns,  as  soon  as  a  sufficient  number  of  men  were  em- 
ployed in  one  kind  of  manufacture  to  make  it  possible,  a  craft 
gild  was  formed  "to  secure  honest  pay  for  an  honest  job." 
There  were  master  workmen  who  were  allowed  to  uudertake  a 
job,  journeymen  who  had  mastered  the  trade  or  craft,  but  had 
not  yet  set  up  for  themselves,  and  apprentices  who  were  learners. 
There  was  no  class  which  must  remain  a  wage  earning  class  all 
their  lives.     Apprentices    expected   to   be   journeymen,   and 


64  OUTLINES  OF  INDUSTRIAL  HISTORY 

journeymen,  masters;  there  was  no  social  gulf  between 
them,  since  the  members  of  a  gild  lived  near  together.  The 
master  workman  was  trader,  undertaker,  and  workman  com- 
bined. 

Right  of  Pri-  The  right  of  property  in  land  has  already  been 
IndJ/e^cfom  mentioned  in  the  paragraph  on  "Landlords." 

of  Contract,  ^g  ^q  private  property  in  goods  other  than  land, 
there  were  all  degrees,  from  that  of  the  slave  who  owned  noth- 
ing, up  to  that  of  the  lords  and  king,  the  latter  having,  in  per- 
sonalty, the  full  right  of  private  property,  including  human 
beings.  It  will  be  remembered  that  the  villeins  could  not  sell 
animals  and  produce  without  the  lord's  permission,  and,  thus, 
were  without  the  full  right  of  property  in  personal  goods  as 
well  as  in  land. 

Just  as  custom  and  tradition  fixed  the  terms  on  which  each 
tenant  upon  a  manor  held  the  score  or  more  of  scattered 
strips  of  land  that  custom  had  decreed  belonged  to  him  to 
work,  so  almost  all  questions  of  service,  barter,  and  exchange 
of  goods  for  money,  were  ruled  by  custom  and  status,  to  such 
a  degree  that  a  free  contract  about  them  was  well-nigh  im- 
possible. Even  the  king  was  bound  to  a  wonderful  degree 
to  maintain  the  customary  relations  with  his  tenants  and 
subjects. 

Characteristics  ^^^^  ^^  productiou  for  exchange,  especially  lack 
and  Limits  of  of  manufacture  for  a  market ;  the  fact  that  each 

tne  Jrenoa.  ' 

man  did  many  things,  was  a  Jack -at -all -trades, 
as  we  say;  and  the  lack  of  means  of  transportation;  in  short, 
the  self-sufficiency  of  each  economic  unit,  chai-acterized  this 
period,  to  a  degree  hard  to  realize  now.  Each  family,  each 
manor,  each  town,  each  monastery,  England  itself,  produced 
the  utilities  consumed  within  the  unit.  Thus  the  name  Home 
Period  of  industry  suggests  its  characteristics. 

No  precise  date  can  be  given  for  the  end  of  this  period  and 
the  beginning  of  another.  The  transition  was  gradual  and 
was  never  comi^lete  for  every  family  and  community.  To  this 
day  there  ai'e  survivals  of  the  s^-stem  in  out-of-the-way  places 


THE  HOME  PERIOD  IN  ENGLAND  65 

in  the  United  States.  Of  course,  there  were  more  survivals 
in  England  during  the  period  which  followed  it.  But 
when  manufacture  and  trade  had  so  developed  that  the  fact 
of  sale  became  more  important  to  large  groups  of  persons  than 
the  fact  of  production  for  home  consumption,  the  industry  of 
the  time  was,  on  the  whole,  different  enough  from  that  already 
described  to  be  given  a  new  name.  During  the  second  hun- 
'  dred  years  after  the  Conquest,  the  change  was  going  on  in  Eng- 
land somewhat  rapidly.  This  stage  of  industrial  developmenb 
in  America  is  treated  later.  In  order  of  time  it  necessarily 
came  later  than  in  England  and  gave  way  to  other  systems 
more  rapidly. 

1.  Give  any  examples  known  to  you  of  families  in 
suggestiTe     t]jQ  United  States  who  now  consume  about  all 

Questions. 

they  produce,  and  produce  all  they  consume. 

2.  Give  reasons  for  this  fact. 

3.  How  do  the  wealth  and  services  they  consume  compare, 
in  variety  and  quality,  with  those  of  the  family  of  an  ordinary 
worker  for  wages,  in  a  town  or  city? 

4.  Give  examples  of  communities  of  people  in  the  country 
that  are  or  have  been  largely  self-sufficing. 

5.  Give  similar  examples  of  nations. 

6.  What  is  the  present  tendency  in  this  particular  of  such 
families,  communities,  and  nations?     Why? 

7.  Give  examples  of  prices  of  goods  which  are  determined 
to  some  degree  by  custom.  "^    '      •/       '^'^  ^      "' 

8.  Give  examples  of  wages  which  are  determined  to  a  great 
degree  by  custom. 

b9.  In  which  field,  that  of  payment  for  services  or  for 
aterial  goods,  is  custom  more  effective  in  fixing  price? 
hy? 

10.  Give  the  best  example  known  to  you  of  the  rapid  fluc- 
tuation of  the  price  of  something,  in  response  to  the  conditions 
of  the  moment — that  is,  a  case  where  custom  has  least 
influence  upon  price. 

11.  Is  freedom  of  contract  greatest  in  this  case?     Why? 


66  OUTLINES  OF  INDUSTRIAL  HISTORY 

12.  Point  out  resemblances  between  the  industrial  life  of 
one  hundred  years  ago  in  the  United  States  and  that  of  Eng 
land  during  the  period  already  described. 

13.  Point  out  as  many  differences  as  possible. 


THE  GILD  PERIOD  IN   ENGLAND  67 


Chapter  II 

THE    GILD    PERIOD    OF    INDUSTRY    IIS"    ENGLAKD* 

Introductory    1  •  Find  out  by  reading,  or  asking  some  member 
Questions.     ^^  ^  labor  union,  all  you  can  about  the  member- 
ship, purposes,  and  methods  of  modern  trade  unions.     For 
example,  ask  questions  similar  to  these : 

a.  Ai'e  men  who  have  different  trades,  like  carpentera";^^^ 
and  bricklayers,  members  of  the  same  union?  Why?LkLi.c::^ 
h.  Are  owners  of  ^land,  capitalists,  and  undertakers f*^'^^^^;^ 
members  of  the  same  union  as  wage-workers?  Gi'^&Ac^  tp^ 
reasons. 

c.  May  skilled  and  unskilled  workers  of  the  same  occu- 
pation be  members  of  the  same  union?  Give  ex- 
amples. 

d.  How  are  the  local  unions  of  men  in  the  same 
trade — for  example,  typesetters  in  different  cities — 
united? 

e.  In  what  ways  do  trade  unions  seek  to  affect  wages 
and  conditions  of  employment  for  their  members? 

/.  What  care  do  labor  unions  ever  take  of  then*  mem- 
bers when  sick,  and  of  the  families  of  those  who 
have  died? 

g.  Is  there,  in  the  United  States,  any  organization 
of  the  unions  of  different  trades  designed  to  help 

'  The  authorities  which  have  been  most  used  in  writing  this  chap- 
ter are  the  volumes  of  Ashley  and  Gross,  already  mentioned,  and  the 
following:  Green  (A.  S.),  Toum  Life  in  the  Fifteenth  Century— 
1894,  The  IMacmillan  Co.,  New  York;  Webb  and  Webb,  The  History 
of  Trade- Unionism— 18Q4,  Longmans,  Green,  &  Co.,  New  York; 
compare  also  Industrial  Democracy — 1897,  by  the  same  authors  and 
publishers;  Ely,  The  Labor  Movement  in  America — 1886,  T.  Y. 
Crowell  &  Co.,  New  York. 


68  OUTLINES   OF  INDUSTRIAL  HISTORY 

all  unious  in  all  trades  to  work  together?     If  so, 
describe  it. 
Ti.  What  influence  do  members  of  trade  unions,  as  a 
rule,  have  in  the  government  of  the  town  in  which 
they  live?     Give  examples. 
4>   *'•  What  are  th'e  purposes  of  trade  unions,  and  by 
"i^^,-'     what    methods    do    they    seek    to    attain    their 
ends? 
^a    ^"  ^;  j.  Is  the  control  of  a  member  by   the  union  as  a 

m)t  v/hole,  an  illustration  of  the  fact  that  what   we 

have  called  society  has  much  to  do  with  the  way 
in  which  an  individual  producer  of  utility  carries 
on   his  enterprise?     Which  is  primarily  sought  in 
unions,   the  welfare  of  a  group  of   men   or   the 
welfare  of  one  man?     Why? 
2.  Make  a  written  statement  of  what  you  learn  about  trade 
;  unions,  for  comparison  with  the  statements  about  craft  gilds 
lUn  this  chapter. 

We  have  gained  some  suggestions  of  the  sim- 

A  Glance  °  °° 

Forward.  pHcity  of  English  industrial  life  in  the  period 
just  after  the  Conquest  when  compared  with  the  life  we 
know.  This  chapter  Avill  try  to  show  that  during  the  Gild 
Period  some  progress  was  made  from  the  simplicity  of  the 
Home  Period  tov/ard  the  complexity  of  the  Factory  Period. 
A  knowledge  of  two  facts  is  of  the  greatest  importance  in  this 
effort — the  Black  Death  and  the  growth  of  towns.  The  Black 
Death,  Vv^hich  carried  off  about  half  the  population  in  1349, 
caused  the  old  agricultural  life,  as  described  in  the  previous 
chapter,  to  be  broken  up;  and  established  new  business 
relations  among  the  inhabitants  of  each  manor.  The  fact  of 
the  growth  of  towns,  on  the  other  hand,  is  of  the  greatest 
importance  in  connection  with  manufacture  and  trade. 

For  a  hundred  years  or  more  before  the  Black 

Extractive  In-    .^^       , ,       , ,  i       i     i 

dustries:       Death  thcrc  had   been  growing  up,  on  some 
Agriculture,    ^^^^^^^.g^  ^^^  custom  ojf^allowing  villeins  to  make 

a  payment  in   produce,  or  in  money,  to  the    lord,    instead 


THE  GILD  PERIOD  IN  ENGLAND  G9 

of  giving  the  nnstomary  days  of  labor  upon  his  demesne 
lands.  ^ 

In  the  records  of  villeins'  service  in  Chaj^ter  I  it  will  bo 
noticed  that  the  equivalent  of  every  service  of  the  villein  in 
Oxfordshire  is  given  in  money,  while  in  Huntingdonshire  it 
is  not  so.  This  is  an  indication  that  the  custom  came  in 
slowly.  This  money  payment  in  lien  of  work  was  called 
''commutation  of  serviceg,"  and  had  a  tendency  to  make  the 
servile  tenant  more  nearly  like  a  free  man  of  to-day  who 
hires  a  farm  instead  of  owning  one.  The  lord  then  took 
these  payments,  and  hired  men  outright  to  cultivate  his 
demesne.  His  bailiffs  and  seneschal  could  oversee  wage- 
workers  as  well  as  villeins.  The  land,  however,  was  still  in 
scattered  strips. 

After  the  Black  Death  the  following  changes  took  place : 

1.  A  scai'city  of  workers  caused  wages  to  rise,  in  some  cases 
as  high  as  fifty  per  cent,  and  both  the  lords   upon   those 
manors  where  commutation  of  services  had  taken  place,  andX^  a« 
the  villeins  who  were  obliged  to  furnish  an  extra  man  or  two  toTy^i.j)^^ 
the  lords  of  the  manors  where  commutation  of  services  had  ^^^  ^ 
not  taken  place,  were  at  once  affected  thereby.  Qru^j 

2.  This  great  rise  in  wages  caused  employers  to  seek  relief 
from  Parliament.^     By  the  Statutes  of  Laborers,  which  were 
enacted    soon   after    the   Black   Death,    wage-workers   were    ^ 
directed  under  frightful  penalties  to  work  for  the  same  rates    ^/ p^ 
as  had  before  been  customary.     In  spite  of  these  laws,  how- 
ever, many  employers  paid  higher  wages  than  formerly. 

3.  Those  lordsjupon  whose  manors  commutation  had  already 
taken  place,  found  themselves,  consequently,  unable  to  h.ire_ 
men  enough,  with  the  payments  made  by  tenants,  to  cultivate 
the  whole  of  their  demesne  lands  in  the  old  way ;  and  were, 
therefore,  forced  either  (a)  to  collect  larger  payments  from 
their  tenants;  (h)  to  give  up  tillage  in  the  old  way  and  devote 
their  demesne  lands  to  the  pasturage  of  sheep,  which  required  a 

'Ashley,  vol.  I,  pp.  20-29. 

^Cunningham  and  McArthur,  pp.  105,  145.    , 


TO  OUTLINES  OF  INDUSTRIAL  HISTORY 

less  number  of  men  than  tillage ;  or  (c)  to  rent  their  demesneu 
to  new  tenants,  at  a  higher  rent  perliaps,  but  on  more  favor  • 
able  terms  respecting  personal  and  industrial  liberty,  than 
were  customary  with  other  tenants. 

4.  In  case  more  rent  was  collected  from  old  tenants,  there 
was  hard  feeling  and  opposition  on  their  part. 

If  the  demesne  lands  were  turned  into  sheep  pastm-es,  those 
parts  that  were  scattered  all  over  the  manor,  side  by  side 
with  the  strips  of  tenants,  caused  trouble,  and  tenants  were 
bought  out,  ill-treated,  and  sometimes  evicted,  in  order  that 
the  whole  manor  might  be  enclosed  for  pasturage.  This  was 
called  "enclosure  of  the  open  fields,"  and  resulted  in  a 
partial  depopulation  of  many  manors.  And,  finally,  in  case 
new  tenants  were  given  more  favorable  terms  than  the  old,  the 
old  tenants  were  jealous  of  the  new. 

In  any  case,  therefore,  the  old  industrial  life  of  the  manors 
was  so  broken  up,  there  were  so  many  causes  of  hard  feeling, 
and  so  much  actual  suffering,  that  the  general  movement  of 
the  servile  classes  toward  greater  economic  and  social  freedom 
took  a  violent  form,  in  1381,  in  the  Peasants'  Eevolt,  or,  as  it 
is  sometimes  called,  Wat  Tyler's  Eebellion.^ 

5.  The  immediate  result  of  the  revolt  was  failure,  for  it  was 
put  down;  and  tenants  on  many  manors  continued  to  be 
refused  a  regi-ant  upon  the  expiration  of  an  old  one,  to  be 
cheated,  bullied,  and  evicted.  Thus  were  the  forests,  grass 
lands,  demesne  lands,  and  even  the  open  fields  held  immemo- 
rially  by  tenants,  enclosed  to  form  sheep  pastures  for  the 
lords.  For  generations  this  enclosure  with  depopulation  went 
on,  until  at  last  Parliament  interfered  in  behalf  of  the  unfortu- 
nate tenants.  This  legislation  took  place  during  the  last  half 
of  the  fifteenth  century  and  the  first  half  of  the  sixteenth. 
After  this,  therefore,  enclosure  was  for  the  purpose  of  so 
redividing  the  lands  of  the  manor  that  each  tenant  could  have 
all  his  land  in  one  enclosed  farm,  instead  of  in  scores  of  scat- 

f-fcit^ , 

1  Ashley,  vol.  II,  eh.  iv.    Compare  Medley,  p.  38. 


THE  GILD  PERIOD  IN  ENGLi^ND  71 

tered  strips. '^     This  method  of  enclosure  did  not  of  necessity 
reduce  the  population  of  a  manor. 

6.  Although  the  rural  population  just  after  the  Black 
Death  was  too  small  for  the  work  to  be  done;  after  several 
generations  had  passed,  the  enclosure  of  large  areas  for  sheep 
farms  gi'adually  made  the  population  too  large.  As  a  conse- 
quence, groat  numbers  of  men,  women,  and  children,  were 
turned  from  their  homes  to  find  work  in  towns,  or  to  become 
homeless  beggars  and  desperate  robbers  throughout  the  land.^ 

7.  After  enclosure  for  the  purpose  of  giving  each  tenant  all 
tis  land  in  one  jAace  had  begun,  it  was  possible  for  the  first  / 
time  to  begin  better  methods  of  farming.     The  first  of  these' 
better  methods  is  named,  in  contrast  with  the  old  two-field  ' 
xnd  three-field  systems,  "convertible  husbandry."      By  this 
system,  all  the  tillage  land,  half  in  pasture  and  half  under  the       ,"'. 
plough,  was  in  use  all  the  time.     Each  half  was  periodically ,^ ' "y 
converted  from  pasture  to  ploughed  land  and  from  ploughed  /  ^]^ 
land  to  pasture.^ 

8.  As  a  result  of  all  these  changes  upon  the  manors  no 
general  description  will  apply  to  all  of  them  after  the  Black 
Death,  as  it  would  fairly  well  before. 

■^Extractive  In-  In  addition  to  the  simple  fishing,  hunting,  tin 
"^  Than*  *""  ^ud  lead  mining,  mentioned  in  Chapter  I,  the 
Agriculture.  Alining  industry  was  of  growing  importance, 
and  Englishmen  were  at  last  coming  to  know  that  the 
coal  deposits  were  of  gi'cat  value.*  There  were  seventy- 
two  movable  forges  for  iron  in  one  region ;  and  forests  also 
were  in  many  places  used  as  never  before  to  furnish  timber 
for  the  increasing  number  of  vessels  that  were  being  built. 
Still,  in  comparison  with  the  agriculture  of  the  time,  all 
other  extractive  industries  were  of  little  importance. 

'Ashley,  vol.  II,  pp.  273,  286,  287. 
«The  same,  vol.  II,  pp.  351-356. 

"The  same,  pp.  2G1,  262.     Compare  Cunningham  and  McArthur, 
pp.  178,  179. 
*Greea  (A.  S.),  vol.  I,  p.  54. 


72  OUTLINES  OF  INDUSTRIAL  HISTORY 

Transformers  In  a  poem  of  the  fourteenth  century — The  Vis- 

in  the  Country.  /^.^  ^y  William  Concerning  Piers  the  Ploiuman^ 

— mention  is  made  of  the  differentclasses  of_jvil^^g?ers  who 

turned  out  into  the  fields  on  a  spring  morning — "a  fair  felde 

fulof  folke."  There  were  "husbandmen,  bakers,  and  brewers; 

f  butchers,  wool-websters,  and  weavers  of  linen;  tailors,  tinkers, 

I  and  tollers  in  market;  masons,  dikers,  and  delvers." 

How  many  of  these  persons  were  so  separate  from  the  occu- 
pation of  farming  as  to  get  their  whole  living  from  their 
transforming  occupation,  it  is  impossible  to  say.  Indeed,  the 
fact  that  they  were  all  pictured  by  the  poet  as  being  in  the 
field  implies  that  many  of  them  were  actually  helping  put  in 
the  seed.  In  any  event  they  were  so  identified  with  transforming 
tasks  that,  even  if  they  did  work  on  the  land  a  part  of  the 
time,  they  were  known  in  their  own  village  by  thp,  name  of 
their  trqTjsfnnTrjrip;  ononpnl.ion.  This  indicates  that  occupa- 
I  tions  .were  becoming  more  separate  from_  each  other, 
even  upon  the  manors,  than  in  the  days  of  the  Home 
Period. 

Transformiac  -^^  ^^®  towus  also  there  had  come  to  be  as  many 
in  Towns,  different  classes  of  artisans  as  there  were  differ- 
ent articles  made  on  English  soil.  These  transforjniag 
classes  in  towns  had  now,  as  a  rule,  becomg^^^v^^lly  separjited 
from  the  occupation_of_Jarming,  bu>^ere  still  often  associ- 
ated  closely  withjbhg_transferrijagjclasses. 

Every~  tr^|forming_jin4r^^'^"' ■'^^JEL^^^  occupation  which 
enrolled  within  it  a  score  or  so  of  wiirkers  for  a  single  town 
was  also,  during  this  period,  organized  into  a  oraff'i  gild.". 
Even  parish  clerks  had  a  gild.^  This  gild  control  of  all 
f  sorts  of  manufacture  and  trade  by  the  local  gilds  of  the  towns 
I  suggests  the  name  "Gild  Period"  which  heads  this  chapter. 
Something  further  will  be  said  a  little  later  about  the  organi- 
zation and  purposes  of  these  gilds,  under  the  heading 
"Society." 

'Langland,  Prologue. 
^Ashley,  vol.  II,  p.  75. 


THE  GILD  PERIOD   IN  ENGLAND  73 

With  the  same  exceptions  as  durin^  the  former 

Transporters.  .    -,      ,  ,  -,  ,  , 

period,  transporters  do  not  yet  seem  to  have 
become  separated  from  the  extractors  and  transformers  on  the 
one  side,  or  from  transferrers  on  the  other.  Certain  it  is  that 
those  who  were  carriers  and  nothing  more,  were  few,  and,  in 
comparison  with  other  occupations,  of  little  importance. 

This  gi'oup  of  men  was  seen  in  Chapter  I  to. 

Transferrers  «j         j.  x  ^ 


Ji-c^r 


have  been  the  first  to  become  wliolly  separate  //^ 
from  the  agricultural  group  in  England.     It  was  not  there 
seen,  however,  to  become  distinct  from  the  transformers,  but 
still  included  many  artisans  who  inarie  the  artinlps  tlipy  snlH. 
During  the  present  period   some  of  the  trades   became  so  ^-  ^       . 
separate   from  the  transformers  that  they  had  no  hand  \n^^^^ '  /^ 
making  goods,  but  bouglit^tliem  from  the  makers  and  resold  W,,.^.,,,,^^ 
them  to  others.     Not  only  so,  but  the  trading  class  became 
more  wealthy  in  many  towns  than  any  other  class.     They 
were  the  ones  who  were  collecting  stores  of  ready  money,  and 
theirs  were  the  gilds  or  '  'liampanies, "  as  they  came  to  be  called, 
which  finally  had  most  influence  in  the  government  of  the 
various  towns.      For  example,   in  London  in  the  fifteenth 
century,  out  of  the  twelve  companies  from  which  alone  the 
mayor  could  be  chosen,  nine  were  organizations  of  transferrers 
rather  than  transformers.^ 

Again,  the  foreign  tradey^especially  in  wool,  was  of  growing  :^|v-«^/^ 
importance,  and  in  the  thirteenth  century  began  to  go  through<bi' ^jtffk^O 
certain  towns  called  ''Staple  Towns"  and  to  fall  into  theA*-'-'''''^ - 
hands  of  certain  merchants  known  as  "Merchants  of  the  i  ■  •/ 
Staple."  Of  course  this  gave  special  privileges  tO- these  towns  '  x^ 
and  merchants,  but  by  this  means  the  king  was  in  return  '^<:J^ /^ 
able  to  collect  taxes  from  the  trade  more  surely  and  easily.^ 

It  would  be  a  great  mistake,  however,  in  spite  of  the  facts 
just  mentioned,  to  suppose  that  the  bulk  of  the  trade  which 
took  place  during  the  period  was  of  this  large  kind.  On  the 
contrary,  a  great_pail^of_the   trade   was  still  narrowly  lociiL 

'Ashley,  vol.  II,  p.  133. 
''Gross,  vol.  I,   pp.  140-148. 


74  OUTLINES  OF  INDUSTRIAL  HISTORY 

Artisans  worked  very  commonly  for  a  pnrely  local  market. 
There  was,  indeed,  a  market  for  many  kinds  of  goods  outside 
the  family  and  gild  of  the  producers,  but  it  was  so  well 
known,  so  local,  so  steady,  that  both  manufacture  and  trade 
could  in  the  main  be  controlled  by^the  petty  yet  minute  and 
definite  rules  and  restrictions/ofjhejocal  craft  gild. 

This  narrowness  of  market  under  gild  control  characterized 
the  period.^  Just  so  soon  as  the  manufacture  and  the  sale  of 
any  article  were  subject  to  the  buyers  of  the  nation  as  a  whole 
and  to  buyers  in  foreign  nations,  the  gild  regulations  made  by 
a  single  English  town  to  control  the  manufacture  and  sale 
of  that  article  could  no  longer  be  enforced.  No  longer  did 
that  industry  belong  to  the  Gild  Period. 

In   this    group   of     occupations,    as    in    most 
of  the    others    in   comparison  with  the  period 
of    the    Family    System    of    industry,   there    was    growing 
/)     ^JL^;/ separation  of  tasks.     It    is    of    comparatively   little  impor- 
]  tance    that    we     are    unable    in    most  cases    to    state    just 

how  far  this  class  of  people  depended  upon  their  services, 
and  how  far  upon  then*  efforts  as  producers  of  wealth, 
for  their  subsistence.  The  really  important  thing  to  see  is 
that  servant  functions  of  the  highest  order  were  being  per- 
formed to  an  increasing  degree  during  the  period.  Langland 
and  Chaucer  lived  and  wrote  during  this  time.  The  uni- 
versities of  Oxford  and  Cambridge  were  all  the  while  doing 
their  j^art  toward  general  education  and  the  overthrow  of 
feudalism,  architecture  flourished,  Caxton  set  up  his  printing 
press  in  England,  Wycliffe  translated  the  Bible,  Magna 
Charta  was  wrested  from  John's  reluctant  hands,  and  Parlia- 
ment became  the  mouthpiece  of  a  liberty-loving  people. 

How  important  the  clergy  were  during  that  period,  and 
how  little  separated  from  each  other  the  highest  classes  of 
servants  still  were,  the  following  statement  admhably  shows : 
"The  clergy,  in  the  widest  sense  of  the  term,  contained 
nearly  the  whole  of   what  we  should  call   the   professional 

lAshley,  vol.  II,  pp.  219,  220.  ~ 


THE  GILD   PERIOD   IN  ENGLAND  75^  , 

classes.      The   architects,    the   physicians,   the   lawyers,    thcjj/^.,.^, 
scribes,  the  teachers  of  the  middle  ages,  were  almost  always'^J.  j   ^ • 
clergymen,    and     when    employed    in    these    callings    were.o/  ' 
rewarded  for  then*  services  with  benefices.     "We  know  but  few 
of  the  men  who  designed  the  great  cathedrals,  churches,  and 
castles  of  the  middle  ages, — those  buildings  which  are  the 
wonder  of  our  age  for  thek  vastness,  their  exquisite  propor- 
tions, and  equally  exquisite  detail.    But  when  we  do  know,  as 
it  were  by  accident,  who  the  builder  was,  he  is  almost  always 
a  clergyman.   .  .  .     The  monks  weiva  JJie  men  of  letters  in  \  f^l^ 
tlie  middle  ages,  the_  historians,  the  jurists,  the  philosophers^ 
the   physicians,    the  students   of    nature."^      Personal   and 
dojnestic  servants    there  also  were,  who,   though  no   longery^-^-^ 
slaves  in  theory,  were  doubtless  then,  as  in  all  times,  subject 
to  all  the  varieties  of  treatment  jDOssible  to  persons  in  this 
relation.     On  the  whole,  the  best  services  of  the  period  were 
not  rendered  directly  to  the  masses  of  the  people. 

The  Black  Death  and  its  subsequent  effects 
upon  the  industrial  relations  of  men  to  each 
other,  together  with  the  slow  breaking  down  of  the  old  feudal 
relation  of  lord  to  tenant,  and  the  rise  of  manufacture  and 
trade,  were  causing  an  uncertainty  of  subsistence  to  be  felt  by 
many  in  this  period,  that  had  before  been  unknown  in  Eng- 
land. Accordingly  the  problem  of  supporting  and  controlling 
both  the  worthy  and  the  unworthy  poor  became  a  new  problem. 
The  problem  was  one  which  at  this  time  had  its  source  chiefly 
ill  the  country,  for  it  was  there  alone  that  the  industrial 
clianges  were  of  such  a  nature  as  to  throw  men  out  of  employ- 
ment. In  the  towns,  the  new  manufacturing  activity  tended 
rather  to  draw  labor  from  the  country  than  to  throw  out  of 
work  those  men  already  at  hand.  The  long  series  of  Statutes 
of  Laborers,  and  the  ordinances  of  those  towns  in  which 
country  people   were  found  begging,  rested  upon  the   idea 

'Rogers,  Six  Centuries  of  Work  and  Wages,  p.   163 — G.  P.  Put- 
nam's Sons,  New  York. 
*Ashley,  vol.  II,  ch.  v. 


76  OUTLINES  OF  INDUSTRIAL  HISTORY 

that  "there  was  sufficient  employment,  at  customary  or 
'reasonable'  wages  in  his  own  town  or  village,  or  in  the 
country  immediately  around,  for  every  able-bodied  man  who 
was  willing  to  work."  But  what  was  to  be  done  with  those 
really  unable  to  work?  The  lawmakers  decided  that  these 
ought  to  be  supported  by  the  places  Avhere  they  happened  to 
be  when  the  laws  were  passed.  But,  if  these  places  were 
unable  to  help  them,  such  persons  should  be  sent  back  to  the 
place  of  their  birth,  there  to  stay  for  the  rest  of  their  lives. 
The  charitable  feeling  of  persons  and  groups  of  persons  in 
general  seems  to  have  been  depended  upon  to  prompt  sufficient 
care,  for  it  was  made  the  sj^ecjflljTnainftsa  of  no  one  tg  care  for 
the__dependent.  Thus  the  matter  stood  until  the  sixteenth 
century. 

For  us  now,  perhaps,  it  will  do  the  most  good  to  remember 
that  during  the  Gild  Period  the  old  ways  of  getting  a  living 
were  so  broken  up,  and  so  many  persons  were  changed  from 
producers  to  non-producers  of  utility,  that  local  and  national 
lawmakers  at  that  time  began  to  legislate  about  the 
j  dependent  classes  and  to  help  such  as  were  able  in  mind  and 
I  body  to  get  back  into  the  productive  classes  again. 

The  towns  had  gone  on  buying  political  and 

Society:  Town         ..,»—       ^       o  J      o    l 

Organization   economical  privileges  from  lords  and  king  until 
they  became,  on  a  smaller  scale,  like  independent 
nations  of  to-day.     Each  town  made  its  own  laws,  protected 
j  itself,  taxed  itself,  regulated  its  own  productive  enterprises, 
*and  made  all  sorts  of  trade  agi-eements  with  other  towns.     In 
times  when  food  v/as  likely  to  be  scarce,  towns  also  bought  up 
•supplies  of  food  and  retailed  it  to  the  citizens  at  cost,  some- 
what as  towns  now  furnish  a  permanent  water  supply.     Mi- 
nute inspection  of  food  and  regulation  of  its  quality  and  prices 
were  also  secured  by  direct  action  of  city  officers.     This  was 
called  *' the  surveying  of  victuals." 

Thus  the  town  controlled  the  manufacture  and  trade  of  its 
own  people,  and  also  the  manufacture  and  trade  of  the  country 

'Ashley,  vol.  II,  oh.  i;  also  Green  (A.  S.),  vol.  I,  ch.  vii-ix. 


THE  GILD  PERIOD  IN  ENGLAND  77 

people  ai'ound  it,  so  fai*  as  their  market  was  in  the  town. 
Each  togn,  therefore,  was  th£ijCieiiteE.=£kLiia-agxiGuJ±U£aL..«ai^^ 
niunity  and  ruled  its  little  economic  and  political  world  with 
great  independence. 

The  organization  of  men  which  first  undertook 
^^^clids  oT^'  ^^®  ^^^^  ^^  economic  regulation  within  the  town 
was,  as  stated  in  Chapter  I,  the  Merchant  Gild, 
But  as  the  number  of  different  productive  processes  in  a  town 
became  larger,  much  of  the  original  work  of  the  Merchant 
Gild  was  taken  up  by  the  craft  gilds,  so  that  finally  the  Mer- 
chant Gild  had  very  little  to  do. 

The  membership  in  a  craft  gild  seems  to  have  included  all 
the  skilled  and  influential  persons  in  any  way  connected  with 
the  manufacture  and  sale  of  a  certain  article.  This  bound 
together :  {a}  the  wealthiest  men  in  the  business — those  able 
to  furnish  the  most  land  and  capital;  (b)  those  employers  who 
were  allowed  by  the  laws  to  take  work  from  customers  and 
become  responsible  for  getting  the  work  done — the  uiidertak- 
ers  of  the  industry ;  and  (c)  skilledjiired  workers.  Unskilled 
hired  workers  and  apprentices  were  not  allowed  to  become 
members . ' 

Two  things  about  this  membership  should  be  clearly  seen : 
first,  if  a  time  ever  came  when  tjie_interes_ts  of  capitalists,  under- 
takers, and  hired  workers  lay  in, different  directions,  the  gild 
would  be  likely  to  fall  to  pieces  from  within ;  second,  if  the 
co^nsumingjmblic  as  a  whole,  an^  th^jLinskilled  w  in/ 

particular,  should   find  the  craft   gild    their    enemy,   these ', 
organizations  might  find  destructive  opposition  to  them  from 
without.     These  two  facts  may  well  be  borne  in  mind  later 
when  a  period  whose  industries  were  no  longer  under  gild 
control  is  studied. 

"With  reference  to  the  officials  of  the  town,  the  gilds  seem 
to  have  passed  from  a  time  when  tliey  controlled  their  particu- 
lar industries  in  such  subordination  to  these  rulers  that  the 
consuming  public  yaa  wejl.  treated,  as  well  as  the  gild  mem- 

'Greeu  (A.  ti.),  vol.  II,  pp.  110,  117. 


78  OUTLINES  OF  INDUSTRIAL  HISTORY 

bers  well_gaid  for  their  industry,  to.  a  tim^  when  the   gild 
officers  became  themselves  the  town  officials  and  often  disre- 
gai'ded  the  general  welfare, 
ly         The  fundamental  purposes  of  gild  regulations  seem  at  first 
V.-pf'd  '^^  ^^^^®  ^^^^  two-fold :'' to  secure  good  material  and  honest 
t/i^fr  ^-^^  workmanship  for  the  consumer,  antf^o  secure  good  wages  for 
^.  the  workmen.      To  carry  out  these  purposes,  the  minutest 

%'<k^\  <ietails  of  quality,  size,  weight,  and  quantity,    also  the  pre- 
'  '  cise  time  and  place  of    sale,  and  the  price  of  each  ai-ticle, 

were  subjects  of  the  craft  gild  legislation,  administration, 
and  adjudication,  subordinate  only  to  the  general  municipal 
and  national  regulations.  The  same  purposes  no  doubt  also 
required  the  organization  of  each  craft  into  master  workmen, 
journeymen,  and  apprentices,  and  rigorously  enforced  restric- 
tions upon  the  number  of  apprentices  a  single  master  work- 
man could  take  at  one  time.  By  these  means  the  total 
number  engaged  in  each  craft  in  each  town,  as  well  as  all  the 
details  of  manufacture  and  sale,  were  under  almost  perfect 
control. 

Besides  the  above  purposes,  craft  gilds  also  often  aimed  to 
unite  persons  whose  religious  beliefs  and  social  interests  were 
alike.  Another  purpose  in  some  organizations  was  tojcgre  for  the 
members  in  times  of  sickness,  and  for  the  families  of  members 
when  death  had  left  them  needy. 

Although  society  during  this  period  controlled 

National  Or-    individual  producors  more  through  its  town  and 

gild   organizations  than  through  the  national, 

yet  some  form  of  national  control  should  not  be  overlooked; 

For  example,  national  standards  for  weights  and  measures 

''were  being  established  by  such  rulers  as  Eichard  I.  (1189- 

1199),  Henry  VI.  (1422-1461),  an*  Henry  VII.  (1485-1509). 

A  royal  officer  called  an  "aulnager"^  was  appointed  to  inspect 

cloth,  both  imported  and  domestic,  and  see  to  it  that  certain 

standards  of  weight,  and  quality,  and  width  were  adhered  to. 

Akhough,  as  manufacture  increased,  local  officials  often  did 

'Cunningham  and  McArthur,  pp.  96,  97. 


THE  GILD   PERIOD  IN  ENGLAND 


79 


most  of  the  work  of  the  anlnager,  his  work  was  not  wholly 
given  np  by  the  nation  until  1809.  In  the  time  of  Henry  II. 
(115-4-1189)  there  was  a  sliding  scale  adopted  to  regulate  the  , 
weighty  of  a  loaf  of  bread  to  be  sold  for  a  farthing  as  the  prices 
of  corn  changed.  Some  form  of  this  attempt  was  kept  up 
into  the  eighteenth  century.  The  coinage  of  money  came 
more  and  more  under  royal  control.  The~Statutes  of  Labor- 
ers of  the  fourteenth  century  sought  to  regulate  wages,  and 
this  attempt  in  one  form  and  another  was  not  given  up  until 
1813.  Foreign  trade  was  made  by  national  order  to  flow 
tlu'ough  Staple  Towns  largely  for  revenue  purposes  and  thsl 
it  might  the  more  easily  be  protected  from  robbers.  And, 
finally,  manufacture  in  England  vv'as  greatly  stimulated  by  the 
importation  of  Fleniish  wjeayers  by  Edward  III.  (1327-1377). 
A  detailed  study  of  the  above  national  attempts  to  make 
conditions  in  accordance  with  which  individual  productive 
effort  must  be  expended  would  doubtless  show  that  the  various 
local  authorities  almost  always  had  gi-eat  freedom  in  adminis- 
tering the  national  laws;  and  that,  even  in  making  these  laws, 
there  was  no  well  defined  national  policy  that  was  carried  out 
under  successive  kings.  The  fact  was  that  certain  industrial 
matters  gradually  became  too  big  to  be  controlled  by  society 
in  its  smaller  organizations,  and,  accordingly,  the  national 
organization  made  blundering  attempts  to  deal  with  them. 

The  feudal  theory  of  landholding  was  still 
maintained,  and  this  did  not  allow  freedom  to 
dispose  of  land  to  men  who  were  otherwise  owners.  It  is 
therefore  plain  that  the  various  classes  of  occupiers  of  English 
land,  from  cotter  to  lord,  were  not  yet  in  theory  full  owners. 
In  practice,  though,  there  was  jwogress  in  this  direction. 
For  example,  the  various  kinds  of  free  tenants,  into  which 
class  tlie  former  villein,  cotter,  and  socmen  classes  were 
changing,  were  gi'adjiially  securing  .legal  protection  as  tenants. i 
Laws  in  accordance  with  which  estates  passed  fi'om  father  to 
son — the  laws  of  entail  and  primogeniturer-were  also  being 

'Garuier,  vol.  I,  p.  221. 


Landlords. 


h:f 


BO  OUTLINES  OF  INDUSTRIAL  HISTORY 

trorked  out.     Unwritten  custom  in  all  the  details  of^land- 
f  folding  was  gradually  giving  place  to  written  law. 

As  a  result  of  the  changes  in  landholding,  however,  large 
numbers  of  persons  during  this  period  were  being  severed 
Irom  any  vital  connection  with  the  land  even  as  tenants.  The 
?ime  was  passing  when  an  Englishman  as  a  matter  of  course 
had  direct  access  to  the  soil. 

The  owner  of  capital  in  a  modern  sense  came 
into  existence  in  agricultural  England  during 
this  period  in  connection  with  sheep  farming.'  Where  this 
industry  was  carried  on  upon  a  large  scale,  the  product  was  no 
longer  looked  upon,  as  in  the  old  days,  as  first  of  all  a  subsist- 
ence product  for  those  men  upon  the  manor  who  had  taken 
part  in  producing  it,  the  surplus  only  being  sold ;  but  the  whole 
product  was  now  first  of  all  a  marketjproduct  to  be  sold  in  the 
highest  market  for  money.  This  being  so,  the  condition 
was  presented  for  an  investment  in  sheep  in  a  truly  capitalistic 
way.  Most  of  the  wool  was  not  wanted  by  the  sheep  farmer 
for  consumption,  but  merely  as  an  aid  toward  getting  for 
himself  money  or  a  gTcater  vai'iety  of  other  goods  for  con- 
sumption. 

Among  the  trading  classes  in  towns,  similar  capitalistic 
investments  were  also  becoming  common.  Foreign  trade  was 
dangerous  and  difficult  as  a  rule,  but,  at  its  best,  it  was  highly 
profitable,  and  brought  in  not  only  a  sufficient  return  to  replace 
the  capital  invested  in  goods,  but  also  a  handsome  surplus. 
From  the  trading  class  came  stores  of  ready  money,  both  to 
be  loaned  to  others  and  to  be  used  by  the  owners  in  carrying 
out  successfully  many  new  enterprises.^ 
jf'  The  industrial  manager  also  came  into  existence 

V  '   both  in  country  and  in  town.     As  a  rule,  the 

possessor  of  capital  himself  performed  this  function,  but  his 
task  was  already  the  distinct  modern  function  of  an  under- 
taker of  business  enterprises  for  gain. 

lAshley,  vol.  II,  pp.  367,  268, 
"The  same,  pp.  209-311. 


THE  GILD  PERIOD  IN  ENGLAND  81 

For  example,  upon  the  manor  it  had  been  customary  from 
an  earlier  time  for  a  lord  to  let  a  whole  manor  to  a  "firmarius" 
(firmar,  farmer)  for  a  term  of  years  at  a  fixed  rental.  But 
this  firmarius  had  been  heretofore  so  bound  by  the  customary 
services,  gifts,  tallages,  etc.,  of  the  manor  that  there  was  a 
continual  check  upon  the  amount  of  produce  and  revenue 
that  he  could  get  out  of  it  for  himself.  As  soon  as  a  whole 
manor  was  so  cleared  of  its  tenants  that  it  could  all  be  devoted 
to  sheep  farming,  the  conditions  were  entirely  new.  The  ten- 
ant could  rent  a  manor  from  its  lord,  stock  it  with  sheep,  and 
manage  his  capital  and  laborers  almost  wholly  upon  the  plane 
of  contract  for  the  utmost  return  in  profit  and  interest  that 
could  be  reserved  after  the  rent  and  wages  were  paid.  Such 
management  of  an  estate  was  that  of  an  undertaker  in  the 
modern  sense,  whether  the  manager  was  also  the  capitalist 
or  not.^ 

In  the  town  also  it  seems  equally  clear  that  the  function  of 
undertaker  in  the  modern  sense  was  rapidly  developing  among 
the  traders  who  were  leai'ning  to  make  dangerous,  but  some- 
times highly  profitable,  ventures.  Of  the  development  of  this 
function  among  the  transformers  more  will  be  said  later  when 
the  Domestic  System  of  industry  is  discussed. 

In  rural  England  the  number  of  men  who 
*  could  not  look  forward  to  the  ownership  or  leas- 
ing of  land,  even  under  the  manifold  restrictions  of  the  time, 
was  growing  much  larger.  Such  men  were  no  longer  feudal 
dependents  of  a  lord  or  a  church  estate,  but  must  look  for  sub- 
sistence to  such  purchases  as  could  be  made  with  the  wages 
assessed  for  them  by  the  justices  of  the  peace,  in  accordance 
with  national  law.  The  restrictions  as  to  movement  from  place 
to  place,  and  as  to  the  amount  and  condition  of  wage,  were 
many  and  minute.  During  this  period  the  rural  wage-worker 
began  in  earnest  the  toilsome  and  disappointing  struggle 
for  economic  freedom  that  has  not  even  yet  been  com- 
pletely won. 

>Ashley,  vol.  II,  pp.  267,  268. 


82  OUTLINES  OF  INDUSTRIAL  HISTORY 

Of  the  wage-workers  in  the  towns,  the  following  extract  is 
worth  quoting  at  length:  "Before  the  middle  of  the  four- 
teenth century  a  'labor  class'  had  come  into  existence,  in  a 
sense  of  that  term  in  which  it  had  never  been  true  before. 
There  were  now  to  be  found  a  considerable  number  of  work- 
men who  were  neither  apprentices,  indented  to  a  master  merely 
for  a  period  of  probation,  nor  master  craftsmen;  men,  who, 
without  having  been  apprentices,  or, — increasingly  as  time 
went  on — after  coming  out  of  an  apprenticeship,  became  the 
employes  of  master  craftsmen.  At  first  the  number  of  these 
'servants,'  'serving-men,'  'valets,'  or  'yeomen,'  as  they  were 
variously  called,  was  probably  very  small.  Many  master 
craftsmen  worked  by  themselves,  or  with  the  aid  only  of  an 
apprentice.  For  some  time  the  'servant'  was  rather  the 
subordinate  companion,  the  assistant  of  the  master,  than  his 
employe.  Many  ordinances  and  statutes  assigned  to  him  a 
wage  more  than  half  as  much  as  that  of  the  master  himself? 
and  it  would  often  be  paid  to  him,  not  by  the  master,  but  bj 
the  person  employing  them  both.  The  relations  of  master  tc 
man  were  not  very  dissimilar  from  those  of  the  head  of  s 
household  to  the  sons  of  the  family ;  and,  as  with  the  sons, 
the  position  of  dependence  was,  at  first  and  as  a  rule,  but  s 
temporary  one, — an  intermediate  stage  during  which  the 
Avorkman  gained  further  experience,  and  saved  a  little  capita/ 
before  he  set  up  on  his  own  account. 

"But  soon  there  are  indications  that  this  class  is  increasing; 
and  also  that  it  is  ceasing  to  be  possible  for  every  average 
journeyman  after  a  few  years'  employment  to  set  up  for  him- 
self. There  are  indications  .  .  .  that  a  body  of  men  is  com- 
ing into  existence  who  are  unable  to  look  forward  as  a  matter 
of  course  to  a  time  when  they  shall  themselves  be  master 
craftsmen.  ...  By  this  time,  therefore, — in  some  industries 
as  early  as  the  end  of  the  fourteenth  century,  but  in  most 
fifty  years  or  more  later, — it  would  be  accurate  to  say  that  a 
'working  class'  had  arisen  in  the  sense  in  which  we  now  use 
that  term.     It  is  desirable  to  call  attention  to  this  and  tc 


THE  GILD  PERIOD  IN  ENGLAND  83 

point  out  the  further  fact  that,  as  soon  as  this  class  appeared, 
what  is  known  as  the  'labor-question'  also  began  to  perplex 
legislators."^ 

The  account,  however,  goes  on  to  show,  what  is  very 
important  for  us  to  note,  that  there  were  at  this  early  day 
such  differences  between  employers  and  emjiloyees  respecting 
wages  and  the  various  conditions  under  which  work  wjis  to  be 
done,  as  to  justify  the  statement  that  the  labor  . question  had 
come  into.  e?,.i§teuce.,  but  that  these  disputes  werejflfial,  isolated 
onefrqm  another,  and  each  involved  so  few  men  and  such  small 
interests,  compared  with  the  labor  question  of  to-day,  as  to  be 
little  more  than  "family  disputes  between  parents  and 
children." 
The  Right  of  So  far  as  the  commutation  of  services  went  on 
Private  Prop-  ^^pon  mauor  and  in  town,  and  so  far  as  the 

erty  and  Free-  "  i         i      •  i 

dom  of  common  fields  were  enclosed  either  for  pasture 
Contract,  qj.  ^qj.  ^}jg  substitution  of  largcr-sizcd  contigu- 
ous holdings  for  the  tenants — so  far  it  may  be  said  that 
the  economic  changes  of  the  time  were  tending  toward  a 
greater  enjoyment  of  the  right  of  private  property  by  individ- 
uals. The  old  feudal  conditions  were  everywhere  slowly  giv- 
ing way,  and  just  in  proportion  as  the  sphere  of  influence  of 
status  and  custom  was  narrowed,  was  the  sphere  of  influence 
of  contract  widened.  Such  a  process  can  not  be  accurately 
described.  It  must  suffice  here  to  see  clearly  that  there  was 
motion  toward  a  gi-eater  enjoyment  of  the  right  of  private 
propexty,-and  free  contract.  How  far  Englishmen  as  a  rule 
still  were  from  the  enjoyment  of  either,  the  brief  suggestions 
already  given  of  the  continuance  of  feudal  theories,  and  of  the 
existence  of  regulations,  minute  and  manifold,  by  craft  gild, 
town,  and  national  authority,  are  sufficient  to  indicate. 

1.   Is  the  modern  trade  union  a  direct  descend-/ 

Suggestive  .  / 

yueutions.     j^ut  of  the  medieval  craft  gild?     Give  reasons.*/ 
2.  In  what  respects  is  a  trade  union  different  from  a  craft  gild?  | 

'Ashley,  vol.  II,  pp.  101,  102,  and  following. 
«Webband  Wel)b,  pp.  11 8. 


84  OUTLINES  OF  INDUSTRIAL  HISTORY 

3.  In  what  respects  are  the  two  alike? 
i     4.  What  does  your  town  or  city  now  do  to  secure  pure  food; 
I  just  weights,  measures,  and  scales;    fair  prices;  etc.,  for  its 
citizens? 

i  5.  Compare  the  things  the  United  States  now  does  for  its 
ipeople  v/ith  those  that  were  mentioned  as  being  done  for  the 
^English  by  the  national  government  in  the  Gild  Period, 

6.  Through  what  other  organizations  than  the  national 
government  does  society  in  the  United  States  now  have  some- 
thing to  say  about  the  manner  of  carrying  on  a  private  busi- 
ness?   Illustrate. 

7.  Who  decides  in  America  how  much  these  various  organi- 
zations of  society  shall  have  to  say  about  a  man's  private 
business?     Illustrate. 

8.  Is  it  more  or  less  difficult  for  a  man  to  set  up  in  business 
for  himself  now  than  in  England  during  the  Gild  Period? 
Why? 

9.  What  is  the  custom  about  apprenticing  boys  to  a  trade 
now?     Why?     Give  examples. 

10.  Have  you  ever  read  any  histories  or  novels  which  treat 
of  the  times  covered  by  the  Home  Period  and  Gild  Period  in 
England?  If  so,  name  them  and  find  out  whether  any  of  the 
statements  made  in  these  two  chapters  are  illustrated  in  them. 

11.  Show  in  what  important  respects  the  Gild  Period  was 
different  from  our  own.     How  was  it  like  our  own? 

12.  How  was  it  different  from  the  Home  Period? 
,"4  '  i      13.  How  was  it  like  the  Home  Period? 


iM 


THE  DOMESTIC  PERIOD  IN  ENGLAND  85 


S K^Th^), 


//- 


Chapter  III 

THE    DOMESTIC     PERIOD     OF     INDUSTRY     I]^     ENGLAND     AND 


AMERICA 


1.  How  did  tlie  efforts  of  men  to  get  a  living 
J 

Questions. 


Introductory   jjjj^^g    ^^^j   influence  npon    the    discovery  and 


colonization  of  America? 

2.  Mention  some  other  remarkable  voyages,  explorations, 
and  efforts  toward  the  occupation  of  territory  by  Europeans 
during  the  fifteenth,  sixteenth,  and  seventeenth  centuries. 

3.  "What  part  in  them  did  the  desire  for  greater  stores  of 
goods  play? 

4.  What  goods  were  most  eagerly  sought?  Give  examples. 
.    5.  Give  any  accounts  you  may  have  read  of  great  caravans, 

vfairs,  trading  routes,  and  trading  companies,  of  these   and 
/previous  centuries. 

6.  Show  how  the  knowledge  of  a  greater  world,  which  came 
to  Europeans  with  the  discovery  of  America,  enlarged  their 
ideas  of  business  enterprises. 

7.  Compare  the  time  taken  for  new  knowledge  to  reach 
all  classes  of  people  in  England  then  and  now.  Give  reasons 
for  the  difference. 

'The  following  general  references  have  been  used  often  in  this 
chapter:  Hobson,  The  Evolidioyi  of  Modern  Capitalism,  A  Study  of 
Modern  Machine  Production — 1894,  Charles  Scribner's  Sons,  New 
York;  Taylor,  The  Modern  Factory  System — 1891,  Kegan  Paul, 
Trench,  Triibner  &  Co.,  London;  Gibbins,  Industry  in  England, 
Historical  Outlines— IHdl ,  Charles  Scribner's  Sons,  New  York ;  Bruce, 
Economic  History  of  Virginia  in  the  Seventeenth  Century — 189G, 
The  Macmillan  Co. ,  New  York ;  Weeden,  Economic  and  Social  His- 
toi-y  of  New  England,  1G20-17S9— 1820,  Houghton,  Mifflin  &  Co., 
Boston;  Wright,  Industrial  Evolution  of  the  United  States — 1895, 
Flood  &  Vincent,  Meadville.  Pa. 


86  OUTLINES  OF  INDUSTRIAL  HISTORY 

8.  How  did  the  discovery  of  America  affect  in  any  way  the 
ideals  of  English  rulers  as  to  what  England  ought  to  be? 
Illustrate. 

9.  After  Europeans  had  come  to  America  what  industries 
did  they  carry  on  in  this  country  in  ways  similar  to  those  of 
their  home  countries?     Give  examples. 

10.  Name  facts  and  conditions  which  would  make  them 
change  occupations  and  methods  of  production  somewhat.  ;"''^'     '  ^ 

11.  Has  your  family  any  tools  or  other  articles  that  were 
once  brought  by  them  or  others  before  them  from  Europe? 
If  so,  describe  them. 

12.  Are  such  tools  and  articles  used  here  now?     Why? 

13.  Have  you  any  tools  or  articles  that  were  made  in  the 
home  by  your  parents  or  grandparents  long  ago?  If  so, 
describe  them. 

14.  Are  such  tools  and  articles  in  use  now?     Why? 

15.  Find  out  the  names  of  the  states  in  the  United  States 
and  the  names  of  the  countries  in  Europe  from  which  your 
parents  and  grandparents  (and  great-grandparents  if  possible) 
have  come. 

[Note. — This  information  has  been  used  by  Professor 
George  E.  Vincent  of  the  University  of  Chicago,  as  follows: 
The  facts  about  each  pupil  in  the  class  are  put  into  the  hands  of 
one  person  who  traces  in  different  colors  upon  outline  maps  of 
the  United  States  and  Europe  lines  from  the  place  where  the 
pupil  lives  to  the  places  where  his  ancestors  lived.  It  is  then 
asked  what  information  the  diagram  gives  about  the  gen- 
eral trend  of  immigration  to  this  country  and  about  migration 
within  the  country.] 

10.  What  is  meant  by  the  word  frontier  in  the  United  States?^ 

'Turner,  The  Significance  of  the  Frontier  in  American  History, 
Annual  report  of  the  American  Historical  Association,  1893,  pp. 
199-227 ;  also  The  Fifth  Year  Book  of  the  National  Herbart  Society, 
1899,  pp.  7-41. 

Compare  Vincent,  A  Belated  Frontier — "The  American  Journal 
of  Sociology,"  July,  1898,  The  University  of  Chicago  Press. 


THE   DOMESTIC   PERIOD   IN   ENGLAND  87 

17.  In  what  respects  is  frontier  industry  different  from  the 
industries  of  one  of  the  oldest  parts  of  the  country?  Give 
illustrations. 

18.  Do  you  know  of  any  places  in  the  United  States  where 
frontier  life  now  exists?  If  so,  describe  the  productive 
processes  there.  ^ 

19.  "What  kind  of  services  can  be  obtained  upon  a  frontier? 

20.  Write  the  history  of  the  industrial  life  of  a  frontier 
settlement  from  the  beginning  until  it  becomes  a  city.^ 

21.  What  change  takes  place  in  the  number  of  persona 
engaged  in  the  production  of  services,  compared  with  the  num- 
ber who  produce  wealth,  as  a  frontier  settlement  develops  into 
a  city? 

22.  Show  that  a  similar  change  in  ratios  between  service 
producers  and  wealth  producers  has  taken  place  in  England 
and  the  United  States,  as  nations,  since  early  days.^ 

23.  Have  you  read  any  novels  which  treat  of  life  in  England 
or  America  between  1450  and  1775?  If  so,  note  the  illustrations 
of  productive  enterprises  and  methods  of  the  time,  and  com- 
pare them  with  such  enterprises  and  methods  of  to-day. 

^'        ENGLAND 

The  Point  of  We  havc  now  brought  this  sketch  of  the  indus- 
view.  ^j.jj^|  development  of  England  down  to  a  time 
when  the  Domestic  System  of  industry  was  slowly  making 
its  way.  This  system  must  now  be  briefly  described,  not  only 
because  its  study  will  reveal  the  steps  in  the  evolution  of  indus- 
try which  follow  those  that  have  already  been  mentioned,  but 
also  because  it  furnishes  the  immediate  background  for  that 
organization  of  industry  which  is  about  us  now,  and  which  we 
briefly  studied  by  means  of  the  suggestions  given  in  Fart  I. 
The  Industrial  Revolution,  and  the  Factory  System  of  indua- 

'Tunier  and  Vincent. 

''Small  and  Vincent,  Introduction  to  the  Studi/  of  Societij,  Book 
11—1894,  The  American  Book  Co..  New  York. 
'Harri.s,  Is   There  Work  Enough  For  .4//.^— "The  Forum,"  vol.  35. 


88  OUTLINES  OF  INDUSTRIAL  HISTORY 

try  which  it  ushered  iuto  the  modern  world,  can  not  be  well 
understood  in  many  of  their  important  relations,  unless  the 
system  which  preceded  them  is  studied  also. 

Another  fact  of  great  importance  to  us  in  the  United  States 
must  also  here  be  emphasized.  During  the  period  of  the 
Domestic  System  of  industry  in  England,  America  was 
colonized,  the  English  colonies  here  were  united  in  enduring 
bonds  of  common  political  and  economic  interests,  and  long 
steps  were  taken  toward  securing  their  independence  of  the 
mother  country.  During  this  period,  therefore,  the  industrial 
developmentof  England  directly  affected  the  industrial  devel- 
opment of  the  English  colonies  in  America,  and,  hence- 
forth, both  England  and  her  colonies  must  be  included  in 
our  story. 

The  time  when  the  Domestic  System  was  coming 
GiidsfstemTo  intense  was  not  the  same  for  all  industries,  for 
'^"tTm  siol-r*  ^°n^®  entered  upon  the  enjoyment  of  more  than  a 
local  market  much  earlier  than  others.  From  the 
middle  of  the  twelfth  to  about  the  middle  of  the  fifteenth  cen- 
tury is  the  period  belonging  in  general  to  the  Gild  System  of  in- 
dustry. Bat  in  the  woolen  industry,  which  we  have  already 
seen  was  the  first  to  enjoy  a  foreign  market,  the  change  from 
the  Gild  System  began  much  earlier  than  1450,  while  even 
after  the  fifteenth  century,  the  Gild  System  was  still  in 
operation  in  many  subordinate  businesses.  These  facts 
should  serve  to  remind  us  once  again  that  industrial 
changes  from  one  system  to  another  are  slow  in  any  par- 
ticular industry,  and  far  from  uniform  for  industries  in 
general.  Industrial  evolution  has  been  the  work  of  cen- 
turies, not  of  decades;  and  even  in  the  case  of  the  Indus- 
trial Eevolution  of  the  eighteenth  century,  the  word 
"revolution"  is  applicable  only  because  there  was  so  great 
a  change  in  the  comparatively  short  period  of  forty  or  fifty 
years. 

We  must,  therefore,  look  for  the  beginnings  of  the  Domestic 
System  in  the  woolen  industry,  some  phases  of  which  have 


THE   DOMESTIC   PERIOD   IN  ENGLAND  89 

already  been  seen  to  have  affected  profoundly  the  agricultural 
life  of  the  English  people  during  the  centuries  following  the 
Black  Death. 
Tranaforming,  P^ofessor  Ashley''  says  that  "the  conditions  under 

Method  of.  I  ^'hich  woolen  manufacture  was  carried  on  by  the 
new  system  were  almost  the  same  the  first  time  these  conditions 
were  revealed  by  a  national  statute  in  14G5  as  they  were  three 
hundi'ed  and  forty  years  afterward  when,  in  1806,  aParliamen- 
tai'y  Committee  made  a  report  on  'the  system  of  the  Master- 
Clothiers  of  the  West  of  England. '  .  .  .  Half  a  century  later,  an 
act  of  1511-12  gives  a  more  explicit  account.  It  speaks  of  the 
wool  being  'delivered  for  or  by  the  clothier'  to  certain  persons 
'for  breaking,  combing,  carding,  or  spinning' ;  of  the  duty  of  the 
breaker  or  comber  'to  deliver  again  to  the  said  clothier  the  same 
wool  so  broken  and  combed' ;  of  the  duty  of  the  carder  and 
spiuueii  'to  deliver  again  to  the  said  clothier  the  due  amount 
of  yai'n  of  the  same  wool';  of  the  duty  of  'the  weaver  which 
shall  have  the  weaving  of  any  woolen  yarn  to  be  webbed  into 
cloth'  'to  weave,  webb,  and  put  into  the  web  for  cloth  as 
much  and  all  the  same  yarn  as  the  clothier,  or  any  person  for 
him,  shall  deliver  to  the  same  weaver';  and  of  the  like  duties 
of  the  'walker  (or  fuller)'  to  return  unimpaired  the  cloth 
committed  to  him. 

"Thus  the  central  figure  to  be  studied  in  the  new  organiza- 
tion of  labor  is  the  clothier.  He  buys  the  wool;  causes  it  to 
be  spun,  woven,  fulled,  and  dyed;  pays  the  artisans  for  each 
stage  in  the  manufacture;  and  sells  the  finished  commodity  to 
the  draper." 

This  clothier,  therefore,  was  a  typical  undertaker,  combin- 
ing capital,  labor,  and  natural  resources,  for  tlie  purpose  of 
securing  a  product  which  he  himself  controlled.     The  clothier 

'As  one  of  the  most  characteristic  differences  between  the  Gild 
Period  and  the  Domestic  Period  appears  in  connection  with  the 
making  of  woolen  clotli,  the  transforming  group  of  occupations  is 
treated  before  the  extractive  group,  in  this  chapter. 

2Vol.  II,  pp.  337,  32a. 


00  OUTLINES  OF  INDUSTRIAL  HISTORY 

"took  the  risk  of  the  fluctuating  demand  of   that  greater 
market  which  had  now  come  into  existence." 

The  small  master  artisan  who,  under  the  Gild  System, 
either  worked  by  the  piece  for  the  consuming  customer  on  the 
customer's  materials,  or  was  a  transferrer  as  well  as  trans- 
former in  that  he  bought  raw  material  and  sold  the  finished 
commodity  to  a  local  customer,  now  became  a  transformer 
only,  and  even  that  in  only  one  of  the  many  partial  processes 
into  which  clothmaking  was  divided.  His  position  was 
henceforth  dependent  not  upon  the  comparatively  stable 
demand  of  local  consumers  but  upon  the  more  or  less  abun- 
dant manufacture  demanded  by  the  clothier.  Still  he  might 
continue  to  have  journeymen  and  apprentices  under  him  as 
before. 

But,  unless  apprenticeship  was  compelled  by  law,  and  that 
could  often  be  evaded,  there  was  nothing  in  the  system  itself 
which  kept  any  individual  who  had  the  necessary  skill  and  a 
single  spinning  wheel  or  hand  loom  from  passing  by  the 
master  workman  and  doing  work  directly  for  the  clothier 
undertaker  who  usually  paid  wages  by  the  piece. 

Under  the  Domestic  System,  therefore,  artisans,  even  when 
working  for  a  master  artisan,  might  do  the  work  either  at 
thek  own  homes  or  at  a  place  near  by  provided  by  the 
master  artisan;  and  they  might  devote  themselves  entirely 
to  spinning  and  weaving  every  working  day  of  the  year,  or 
give  up  to  manufacture  merely  those  occasional  hours  and  days 
that  could  be  snatched  from  recreation  on  the  one  hand,  or 
could  be  sjsared  from  their  ordinary  work  in  the  field  and 
about  the  house  on  the  other. 
Transformers  Thus,  uudcr  the  Domcstic  Systcm  of  industry. 
Increase  of  in  j^j^g  couutrv,  for  the  first  time,  became  familiar 

the  Couxitry  •'  '  ' 

Districts,  -^i^}^  classes  of  artisans  who  were  devoting  them- 
selves to  the  making  of  goods  not  demanded  by  local  needs. 
All  forms  of  textile  manufacture  were  thus  scattered  over  the 
country.  Of  the  textile  goods,  woolen  was  by  far  the  most 
important,  but  linen,  silk,  and  coTEori  goods  were  also  manu- 


THE  DOMESTIC  PERIOD  IN  ENGLAND  91 

factured.  The  tools  were  generally  simple,  worked  by  hand, 
and  used  in  or  near  the  homes  of  the  workers.  IMost  of  these 
country  artisans  owned  a  cow  and  cultivated  a  garden  or  a  larger 
plot  of  ground,  from  which  sources  the  family  was  able  to  get 
a  considerable  part  of  tlie  necessary  food.  Hardly  any  of  the 
rural  manufacturers,  therefore,  were  left  with  absolutely  no 
means  of  subsistence  while  temporarily  deprived  of  their 
regular  employment. 

Another  new  phenomenon  of  this  period  must  be  noted. 
Xot  only  were  artisans  scattered  through  the  country  districts, 
but  those  ai'tisans  who  were  making  a  special  kind  of  cloth 
were  scattered  over  one  area,  and  those  making  another  kind 
over  another  area.  "From  its  fu'st  appearance  the  worsted 
manufacture  had  been  confined  to  Norwich  and  the  country 
around.  So  now  the  new  woolen  manufacture  in  the  country 
districts  did  not  spread  itself  evenly  over  the  whole  country, 
but,  after  a  short  period  of  experiment,  concentrated  itself  in 
particular  districts — especially  the  Eastern  Counties,  Devon- 
shire, and  Somerset,  and  Yorkshire.  The  concentration  went 
further  still ;  for  each  of  these  districts  confined  itself  to  the 
manufacture  of  a  few  staple  varieties  peculiar  to  itself."^ 

Thus,  during  this  period,  the  personal  division  of  labor  was 
carried  further  than  it  had  been  carried  before  in  England 
since  the  Norman  Conquest,  and  a  beginning  of  territorial 
division  of  labor  was  clearly  under  way.  Towns  as  well  as 
families  were  no  longer  able  to  satisfy  all  of  their  own  wants. 
Extractive  In-  We  havc  already  spoken,  in  Chapter  II,  of  the 

Agriculture,  rapid  enclosurc  of  the  common  fields  during  tiie 
last  part  of  the  fifteenth  century  and  the  first  part  of  the  six- 
teenth. After  that,  it  wont  on  very  slowly  during  the  whole 
period  until  about  1 7G0,  at  which  time  probably  one-third  of  the 
work  remained  to  be  done.'"'  It  is  therefore  clear  that  the  same 
background  of  a  wasteful,  unprogressive,  and  awkward  system 
of  agriculture,  as  was  described  in  Chapter  I  as  general  in 

>Asliley.  vol.  II.  pp.  40,  47.  ' 

^Tlie  .same,  p.  286. 


92  OUTLINES   OF  INDUSTRIAL  HISTORY 

England  at  the  time  of  the  Domesday  Survey,  must  be  imag- 
ined as  existing  over  fully  one- third  of  the  arable  land  of 
England  during  the  whole  period  now  under  consideration. 
It  is  true  that  conditions  of  tenure  and  the  personal  interrela- 
tions of  the  manorial  population  were  somewhat  different  now ; 
but  the  methods  of  tillage  were  not  radically  changed.  Upon 
the  manors  where  enclosure  had  taken  place  for  the  purpose 
of  establishing  convertible  husbandry  some  progress  was  doubt- 
less being  made,  but,  taking  the  agriculture  of  England  as  a 
whole,  it  presents  only  the  varieties  possible  between  pasturage 
on  the  one  hand  and  convertible  husbandry  on  the  other. 
Agi'icultural  implements  were  still  comparatively  simple, 
varieties  of  roots  and  grasses  were  few,  the  science  of  fertiliza- 
tion was  unknown,  breeds  of  animals  were  inferior,  rotation  of 
crops  was  hardly  begun,  and  with  the  exception  of  wool,  and 
some  live-stock  which  could  be  di'iven  to  a  distant  market, 
markets  were  still  narrowly  local.  Anything  like  modern 
agricultural  societies  and  papers,  for  the  social  study  of  agri- 
cultural methods  and  the  general  distribution  of  the  best 
extant  knowledge  of  soils,  seeds,  breeds  of  animals,  and  tillage, 
was  unknown. 

No  reliable  statistics  of  occupations  at  different  periods 
exist,  but  the  following  estimate  was  made  in  1688.^  It 
shows  how  slightly  occupations  were  classified  and  also  sug- 
gests the  continued  importance  of  agriculture  in  comparison 
with  all  other  occupations : 

Agricultural    Classes   (freeholders,    farmers, 
laborers,     out  -  servants,     cottagers,     and 

paupers) 4,625,000 

Manufacture 240,000 

Commerce 246,000 

[Note. — Graphic  statements  of  these  figures  are  easily 
entered  in  note-books,  and  are  interesting  to  compare  with 
similar  statistics  for  other  periods.] 

'  Hobson,  p.  23. 


THE  DOMESTIC  PERIOD  IN  ENGLAND  93 

Sfdustrlls-    ^^^^^  mining  was  not  of  great  importance  until 
Miuing.i      -^vell  into  the  eighteenth  century.     Even  as  late 
as  1720,  England  imported  20,000  out  of  the  30,000  tons  of  \ 
iron  required  for  her  hardware  manufactures.  At  tliis  date  it  is  - 
estimated  that  the  mining  of  iron  and  manufacture  of  hard-- 
ware  employed  about  200,000  persons.     Copper,  brass,  and 
tin,  were  comparatively  uniniiDortant. 

In  a  word,  lack  of  power,  of  adequate  machinery,  and  of  meth- 
ods kept  man,  until  near  the  close  of  the  period,  almost  helpless 
in  the  presence  of  the  vast  coal  and  iron  deposits  of  England, 
Extractive  In-  Although  the  irou  smelted  was  inconsiderable  in 
^"^beH^^g  an™'  quantity,  it  cost  England  a  great  amount  of 
Fishing.  timber  during  the  seventeenth  and  the  eighteenth 
century.  For  the  pm-pose  of  smelting,  timber  was  reck- 
lessly used  during  much  of  the  period.  The  decreasing 
forests  were  also  called  upon  to  furnish  an  increasing  amount 
of  timber  for  shipbuilding. 

As  to  fishing,  it  must  be  supposed  that  fish  had  always  been 
taken  in  larger  or  smaller  quantities  along  the  coasts  of  Eng- 
land. Bat,  during  Tudor  times  (1485-1603),  fishermen  were 
greatly  stimulated  by  various  national  laws  which  had  for  their 
ultimate  purpose  the  building  up  of  a  large  merchant  fleet 
manned  by  skilful  seamen.  These  laws  were  of  two  kinds : 
first,  measures  designed  to  increase  the  consumption  of  fish — 
for  examjile.  Englishmen  were  to  eat  fish  two  days  in  the  week 
the  year  round ;  second,  measures  which  provided  bounties  to 
successful  fishermen.  Although  the  first  of  these  laws  could 
not  in  the  nature  of  the  case  be  universally  enforced,  yet, 
because  of  legislation  and  for  other  reasons,  the  English 
developed  a  numerous  and  hardy  class  of  fishermen.  During 
the  seventeenth  century  they  were  so  successful  as  to  wrest 
the  local  herring  fisheries  from  the  Dutch,  who  had  long 
monopolized  them.  From  the  very  first,  Englishmen  have 
had  their  full  share  of  the  Newfoundland  cod-fishing.'^ 

'Hobson,  p.  23. 

^Cunningham  and  McArthur,  pp.  21,  124,  125. 


94  OUTLINES  OF  INDUSTRIAL  HISTORY 

Transportation:  If  somc  adequate  idea  of  the  transportation 
The  Ways.'  facilities  of  this  long  period  can  be  gained  it  will 
help  us  more,  probably,  than  any  other  one  thing  to  under- 
stand the  marvelous  differences  between  the  present  century 
and  the  eighteenth.  First,  what  were  the  ways  by  land  and 
by  water?  After  the  Roman  roads  decayed,  it  does  not  appear 
that  any  adequate  attention  was  given  to  roads  in  England 
until  late  in  the  eighteenth  century.  Throughout  the  middle 
ages  they  were  left  almost  entirely  to  private  care.  "Even  as 
late  as  the  middle  of  the  sixteenth  century,  the  public  ways 
appear  to  have  been  little  better  than  tracks  made  at  random 
through  the  fields;  in  dry  weather  they  might  have  been 
practicable,  but  in  the  winter  season  their  condition  must  have 
been  dreadful.  The  only  attention  bestowed  upon  them  by 
the  legislature  until  the  time  of  Mary  I.  (1553-1558)  amounted 
to  an  injunction  to  the  neighbouring  proprietors  not  to  plough 
them  up,  and  enclose  them  as  part  of  their  lands.  "^  Mrs. 
A.  S.  Green  tells  a  story  relating  to  a  highway  in  the  market 
town  of  Aylesbury  in  1499,  which  seems  almost  incredible. 
A  glover  with  his  wares  was  on  his  way  to  this  town. 

"It  happened  that  an  Aylesbury  miller,  Richard  Boose, 
finding  that  his  mill  needed  repairs,  sent  a  couple  of  servants 
to  dig  clay,  'called  ramming  clay,'  for  him  on  the  highway, 
and  was  in  no  way  dismayed  because  the  digging  of  this  clay 
made  a  great  pit  in  the  middle  of  the  road  ten  feet  wide,  eight 
feet  broad,  and  eight  feet  deep,  which  was  quickly  filled  with 
water  by  the  winter  rains.  But  the  unhappy  glover,  making 
his  way  to  the  town  in  the  dusk,  with  his  horse  laden  with 
paniers  full  of  gloves,  straightway  fell  into  the  pit,  and  man 

'Cooley,  Tlieory  of  Transportation,  Publications,  American  Eco- 
nomic Association,  vol.  IX,  No.  3,  ch.  i,  New  York.  The  reader  is 
referred  to  this  work  for  a  sociological  study  of  transportation. 
The  division  of  the  subject  into  the  sub-heads  "The  Ways,"  "The 
Vehicle"  and  "The  Motive  Power"  is  Mr.  Cooley's. 

*Garvey,  The  Silent  Revolution,  p.  9—1852,  William  &  Frederick 
G.  Cash,  London. 


THE  DOMESTIC  PERIOD  IN  ENGLAND  95 

and  horse  were  drowned.  The  miller  was  charged  with  his 
death,  but  was  acquitted  by  the  court  on  the  ground  that  he 
had  no  malicious  intent,  and  had  only  dug  the  pit  to  repiii- 
his  mill,  and  because  he  really  did  not  know  of  any  other 
place  to  get  the  kind  of  clay  he  wanted  save  in  the  high- 
road."^ 

After  1523,  various  acts  of  Parliament  were  passed  relating 
to  roads,  but  they  were  not  improved  much  until  well  into 
the  eighteenth  century.  A  series  of  acts  establishing  turn- 
pikes and  authorizing  the  collection  of  tolls  for  their  repair 
began  in  the  reign  of  Charles  II.  (1660-1685),  and  were 
generally  operative  throughout  the  eighteenth  century,  so 
that  by  the  first  of  the  nineteenth  century,  roads  were,  in  com- 
parison with  the  past,  in  good  condition. 

Still,  these  turnpikes  did  not  extend  over  all  England,  and 
though  lauded  by  some  travelers  Avere  execrated  by  others. 
The  following  picture  of  transportation  facilities  of  the  middle 
eighteenth  century  is  probably  fairly  accurate : 

"Agricultural  produce  was  almost  entirely  for  local  con- 
sumption, with  the  excejDtion  of  cattle  and  poultry,  which 
were  di'iven  on  foot  from  the  neighbouring  counties  into  Lon- 
don and  other  large  markets.  In  the  winter,  even  round 
London,  bad  roads  were  a  great  obstacle  to  trade.  The 
impossibility  of  di'iving  cattle  to  London  later  than  October 
often  led  to  a  monopoly  of  winter  supply  and  high  prices. 
The  growth  of  turnpike  roads,  which  proceeded  apace  in  the 
first  half  of  the  century,  led  to  the  large  substitution  of  carts 
for  pack  horses,  but  even  these  roads  were  found  'execrable' 
by  Arthur  Young,  and  off  the  posting  routes  and  the  neigh- ^ 
borhood  of  London  the  communication  was  extremely  diffi- 
cult. 'The  great  roads  of  England  remained  almost  in  this 
ancient  condition  even  as  late  as  1752  and  1754,  when  the 
traveler  seldom  saw  a  turnpike  for  two  hundred  miles  after 
leaving  the  vicinity  of  London.'  "^ 

'Green  (A.  S.),  vol.  II,  pp.  31,  .S3. 

^Hobson,  p.  25.     Comj)are  Gibbins,  354,  355. 


96  OUTLINES  OF  INDUSTRIAL  HISTORY 

In  regard  to  water  ways,  some  attention  had  been  given 
to  the  rivers  and  harbors  before  1750,  but  it  was  not  until 
after  this  date  that  the  Duke  of  Bridgewater  practically 
inaugurated  the  great  system  of  canals  which  soon  connected 
many  rivers  and  important  towns.  By  means  of  these  canals 
the  internal  transportation  of  heavy  commodities,  especially 
coal,  for  considerable  distances  was  first  made  possible  in 
England/ 
j^  Transportation:  ^^  Water  ways  Were  still  in  a  primitive  condition 
The  Vehicle,  ^t  the  middle  of  the  eighteenth  century,  and 
if  roads  could  be  called  good  only  in  comparison  with  previous 
ones,  at  the  end  of  the  century,  what  can  be  said  of  vehicles? 

As  to  ships,  we  know  that  they  were  such  that  the 
whole  Atlantic  coast  of  America  had  come  to  know  them,  and 
that  the  Pacific  and  Indian  oceans  were  gTowing  accustomed 
to  them.  The  world  is  greatly  in  debt  to  the  ships  of  this 
period.  We  know  also  that  the  English  sliips  did  not  suffer 
the  Spanish  Armada  to  land  an  army  in  England,  and  that 
English  colonists  and  English  trade  more  than  held  their  own 
in  competition  Avith  all  the  rest  of  Europe.  In  part  at  least 
these  results  were  due  to  English  ship-builders  and  sailors,  who 
were  continually  encouraged  and  often  substantially  aided  by 
national  legislation. 

For  the  transportation  of  merchandise,  packhorses  were  only 
partially  supplanted  by  carts  during  the  first  half  of  the  eight- 
eenth century.  Persons  also,  until  the  time  of  Elizabeth  (1558- 
1603),  must  ride  either  upon  horseback  or  in  a  horse-litter. 
Doubtless  either  of  these  methods  was  for  a  long  time  more 
comfortable  than  the  rude  coaches  which  were  first  used,  and 
we  find  Arthur  Young  traveling  on  horseback  in  the  last 
quarter  of  the  eighteenth  century. 

The  first  coach  is  said  to  have  been  used  by  Queen  Eliza- 
beth in  1564.^  "These  fir^sX. coaches  were  vast,  unwieldy 
structures  of  timber  and  iron,  which  rested  on  the  axle  with- 

'Hobson,  pp.  25,  26. 
^Garvey,  pp.  45,  46. 


THE  DOMESTIC  PERIOD  IN  ENGLAND  97 

out  the  intervention  of  springs,  or  any  other  contrivance  to 
break  the  force  of  tlie  tremendous  bumps  and  shocks  which 
every  moment  threatened  to  dislocate  the  frames  of  the  pas- 
sengers. It  required  six,  eight,  sometimes  ten,  horses  to  drag 
those  ponderous  vehicles  at  a  walking  pace  through  the  series 
of  ruts,  gullies,  and  quagmires  which  were  then  called  roads, 
and  what  with  the  groaning  and  creaking  of  the  machine 
itself,  and  the  shouting  and  flogging  of  the  postilions,  it  may 
be  a  question  whether  the  grandeur  of  the  new  mode  of  con- 
veyance compensated  for  its  miseries." 

In  spite  of  their  discomfort,  however,  the  use  of  coaches  so 
increased  that,  in  1673,  we  find  a  seventeenth  centm'y  croaker 
bemoaning  the  fact  that  coaches,  carrying  eighteen  passengers 
each,  made  the  distance  from  London  to  York,  Chester,  and 
Exeter  in  four  or  five  days.  "He  then  calculates  the  vast 
amount  of  employment  those  eighteen  persons  would  give  to 
grooms,  farriers,  innkeepers,  hostlers,  saddlers,  etc.,  if  each 
were  to  ride  his  own  horse  instead  of  adopting  the  revolution- 
ary practice  of  clubbing  for  a  common  conveyance."^ 
Although  it  must  be  supposed  that  these  coaches  slowly 
approached  the  patterns  with  which  we  are  familiar  in  the 
tally-ho  and  modern  coach,  still  it  must  be  remembered  that 
the  coach  in  some  form  was  the  limit  of  comfort  and  speed 
in  land  travel  during  the  most  favored  years  of  the  most 
favored  century  of  this  long  period. 

Trans  ortation-  I^^^'i^g  ^^'G  last  half  of  tliis  pcriod,  therefore,  we 
jHotive  Power,  jj^g^y  think  of  cumbrous  vehicles  for  passengers 
and  rude  carts  for  merchandise  coming  slowly  into  use  upon 
the  gradually  improving  turnpikes  of  England.  At  best, 
however,  they  were  all  painfully  drawn  by  the  puny  strength 
of  panting  animals.  Upon  the  water  likewise,  although  Eng- 
lish sails  were  now  upon  every  sea,  commodities,  letters,  dis- 
patches, and  men  themselves  were  all  continually  jit  the 
mercy  of  the  inconstant  wind. 

'Garvey,  p.  50. 


98  OUTLINES  OF  INDUSTRIAL  HISTORY 

Transporters  Althougli  Ml',  Eogers*  tliinks  the  roads  of  the 
A8  a  Class,  thirteenth  and  fourteenth  centuries  were  better 
than  in  the  first  half  of  the  eighteenth,  and  that  there  was  a 
class  of  men  in  the  earlier  period  who  devoted  themselves 
wholly  to  carrying  goods  for  pay,  yet  we  certainly  find  many 
signs  in  the  second  half  of  this  period  of  a  growing  differentia- 
tion of  a  transporting  class.  Coaches  for  passengers  have 
already  been  mentioned.  In  a  general  way,  also,  increase  in 
trade  that  was  not  narrowly  local,  and  the  improved  facilities 
for  transport  of  all  kinds  would  necessitate  an  increasing 
specialization  of  persons  for  the  carrying  business. 

In  addition  to  these  considerations,  one  special  illustration 
may  be  mentioned.  James  I.  (1603-1625)  organized  a  body 
of  messengers  to  carry  letters  and  dispatches  more  regularly 
than  had  before  been  possible  by  special  couriers.  Charles  I. 
(1625-1649)  improved  upon  this  organization  and  established 
a  rate  of  postage  over  a  few  roads  for  England  and  Scotland. 
These  mails  were  carried  by  boys  on  horseback,  at  the  rate  of 
five  miles  an  hour,  when  they  were  not  delayed  by  losing 
their  way  and  were  not  stopped  by  robbers.  Important  mes- 
sages were  still  sent  by  special  couriers.  Cromwell,  in  1657, 
and  Queen  Anne  (1702-1714)  still  further  improved  the  postal 
service  so  that  the  basis  of  the  jDresent  system  was  laid.  Bui; 
the  expense  was  so  great  that  only  the  rich  could  afford  to 
send  frequent  letters.  "Poor  persons  living  in  different  parts 
of  the  country  were  then  [early  eighteenth  century]  more 
completely  sepai'ated  from  one  another  than  the  settler  in 
Australia  is  now  from  his  friends  in  England,  though  the 
whole  mass  of  terraqueous  globe  intervenes  between  him  and 
them.  "2 

In  concluding  these  paragraphs  on  the  condition  of  trans- 
portation during  the  period  of  the  Domestic  System  of  industry, 
it  must  be  said,  that  transportation  of  heavy  goods  long  dis- 
tances by  land  was  rarely  attempted ;  that,  though  there  was 

'Rogers,  p.  135. 
*Garvey,  p.  54. 


THE  DOMESTIC  PERIOD  IN  ENGLAND  99 

now  an  iucreasing  number  of  transporters,  most_of,.tlie-ca*ry- 
iug  was  still  undifferentiated  from  the  work  of  extiactora  and 
transformers  on  the  one  hand  and  from  the  work  of  trans- 
ferrers on  the  other ;  and  that,  in  consequence,  most  of  the  > 
inland  transportation  that  had  developed  was  still,  as  for  cen- 
turies past,  toiling  along  the  country  ways  that  radiated  from 
towns  into  tributai'y  agricultural  areas  rather  than  along  the 
more  ambitious  turnpikes  that  were  being  constructed  between 
these  towns. 
//  Transferring:  In  addition  to  the  Merchants  of  the  Staple,  pre- 

conapanies.'  viously  mentioned,  whose  business  was  mostly  in 
the  export  of  raw  materials,  there  grew  up  during  this  period 
comjianies  of  merchants  for  internal  trade,  and  Merchant 
Adventurers  for  pushing  foreign  trade  in  manufactured 
articles,  especially  cloth. 

Various  other  special  companies  more  or  less  under  national 
supervision  and,  as  a  rule,  Avith  national  consent  and  a 
chai'ter,  were  also  formed  for  both  political  and  economic  pur- 
poses. The  East  India  Company,  The  Plymouth  Company, 
The  London  Company,  and  The  Hudson  Bay  Company  are 
familiar  names  to  all  of  us.  The  part  they  played  in  the 
opening  up  of  trade  with  new  lands,  in  colonization,  and  in 
the  political  organization  of  colonies  can  hardly  be  overesti- 
mated. India  and  Xorth  America  possess  many  traces  of 
their  activity  to  this  day.  The  Chartered  Company  of  South 
Africa,  which  a  few  years  ago  came  into  such  political  prom- 
inence on  account  of  its  friendly  attitude  toward  the  attempted 
raid  of  the  Transvaal  by  Dr.  Jameson,  and  later  was  such  an 
important  factor  in  the  war  between  the  English  and  the 
]5oers,  is  a  good  example  in  our  times  both  of  the  economic 
and  the  political  possibilities  of  such  companies. 

TranHforring:  I>«ring  the  rcigu  of  Henry  VIII.  (1509-1547), 

L'ncertaj^ntj  of  j^H  the  trade  of  the  transferring  companies  with 

Markets.      ^\^q  territory  subject  to  Charles  V.  of  Spain  was 

for  a  time  cut  off.     How  this  affected  the  English  merchants, 

'Gross,  vol.  I,  pp.  148-15.']». 


100  OUTLINES  OF  INDUSTRIAL  HISTORY 

and,  through  them,  all  connected  with  the  manufacture  of  cloth 
is  told  by  Professor  Ashley^  in  a  quotation  from  a  contemporary 
historian,  Ilall,  as  follows :  "All  broad-cloths,  kersies,  and  cot- 
tons lay  on  their  hands.  Insomuch  as  when  the  Clothiers  of 
Essex,  Kent,  Wiltshire,  Suffolk,  and  other  shires  which  use 
Cloth-making,  brought  clothes  into  Blackwell  Hall,  of  London, 
to  be  sold,  as  they  were  wont  to  do,  few  merchants  or  none 
bought  any  cloth  at  all.  When  tlie  Clothiers  lacked  sale  they 
put  from  them  their  spinners,  carders,  tuckers,  etc.,  and  such 
other  which  live  by  clothmaking,  which  caused  the  people 
greatly  to  murmur,  and  specially  in  Suffolk." 

Compare  this  clogging  of  the  activity  of  foreign  merchants, 
clothiers,  master  artisans,  journeymen,  apprentices,  and  even 
farmers  who  raised  the  wool,  with  the  comparatively  stable 
conditions  of  the  economic  activity  of  the  jDopulation  during 
the  old  Norman  days  of  self-sufficing  Family  Industry. 
England  itself  could  no  longer  live  an  isolated  economic  life. 
But  this  foreign  market  was  more  important  in  the  cloth  trade 
than  in  any  other,  and  the  bulk  of  English  industry,  even  in 
the  transforming  group  of  occupations,  should  perhaps  still  be 
thought  of  as  taking  place  within  homes  for  home  consump- 
tion and  for  small  town  markets. 

Some  writers  speak  of  the  days  of  customary 

Trfiusf  crrinfiTi 

Natural       exchaugcs   by   barter   as   a    period   of    natural 

Economy  and  _        .      .  , 

Money  ^  ecouomy,  and  of  times  when  money  payments 
are  made  on  the  basis  of  a  contract  as  a  period 
of  money  economy.  Only  when  money  economy  prevails  can 
each  new  contract  be  made  on  the  basis  of  the  conditions 
existing  at  the  time — little  affected  by  custom.  Indeed,  goods 
and  services  often  continue  to  be  sold  for  customary  prices  for 
a  long  time  after  barter  has  given  way  to  money  payments. 
In  any  nation,  as  the  custom  of  barter  grows  less  common, 
the  practice  of  money  payments  grows  more  common.     In 

'Ashley,  vol.  II,  p.  231. 

^Cunningham  and  McArthur,  pp.  140,  and  following.  Compare 
also  Ashley,  vol.  II,  p.  395. 


THE   DOMESTIC  PERIOD   IN   ENGLAND  101 

England  at  the  time  ofDomesdjiy  Survey,  barter — natural 
economy — was  most  common,  although  money  payment — 
money  economy — was  known.  Jnst  Avhen  money  payments 
became  more  common  than  barter  it  is  hard  to  say.  During 
theJ)ome^tLc  J?eriod,  however,  so  far  as  the  control  of  gilds 
broke  down,  and  so  far  as  trade  extended  from  one  town  to 
another  and  to  foreign  countries,  moiiey,payHit;Ait^sbe!Ciime,JJie 
rule.  On  the  other  hand,  so  far  as  trade  still  continued  to  be 
between  neighbors  and  under  the  control  of  local  gilds, 
barter  was  doubtless  very  common. 

Transferring:  C-'oiuagc  became  moro  and  more  the  care  of  the 
PHc^?^a*ud  national  government.  Henry  VIII.  (1509- 
lian'ks.  1547)  jii^t^  Edward  y I,  (1547"l553)' debased  the 
coinage  by  reducing  the  size  of  coins,  and  adding  to  the  amount 
of  alloy  in  them ;  and  men  accordingly  refused  to  give  so  many 
other  goods  for  a  coin  as  formerly.  Prices  went  u^  rapidly. 
Elizabeth  (1558-1603)  restored  coins  to  their  old  degree  of  fine- 
ness, bat  did  not  restore  their  weight.  Silver  also  came  in  from 
the  New  '\^'orld,  so  that  coin  was  more  abundant.  Men,  there- 
fore, still  refused  to  give  so  many  goods  as  of  old  for  a  coin. 
One  small  coin,  when  coins  were  many,  did  not  seem  so  desir- 
able to  Englishmen  as  one  large  coin  of  equal  fineness  had 
seemed  when  coins  were  not  so  many.  On  account  of  this 
decrease  in  size  and  increase  in  number  some  writers  estimate 
that  a  coin  in  the  time  of  Charles.1.  (1(;25-101!))  would  buy 
only  one-third  or  one-fourth  as  many  commodities  in  general 
as  a  coin  of  the  same  name  in  the  time  of  Henry  VII.  (1485- 
1509). 1 

Another  difficulty  that  had  to  bo  met,  and  it  is  still  puzzling 
statesmen,  was  the  adjustment  of  the  coinage  of  England  to 
that  of  other  nations.  The  increase  in  foreign  trade  necessi- 
tated the  continual  payment  of  trade  balances,  and  the  main- 
tenance of  armies  in  the  Low  Countries  by  William  III. 
(1(JS!)-17()2)  required  money  of  a  higher  standard  than  the 
English  to  be  spent  there.     At  one  time  it  took  one  hundred 

'Cunningliam  and  McArthur,  p.  145. 


102  OUTLINES  OF  INDUSTRIAL  HISTORY 

j  and  thirty-three  English  pounds  to  buy  the  supplies  in  the 

i  Low  Countries  that  one  hundred  pounds  of  the  local  money 

; would  buy.     Better  coins  were  therefore  minted  in  England.^ 

'     In  the  eighteenth  century,  the  changing  values  of  gold  and 

silver  caused  the  present  day  problem  of  maintaining  a  proper 

ratio  so  that  coins  of  both  metals  would  circulate  freely,  to 

come  into  special  prominence  in  England.     Various  changes 

in  the  weight  of  coins  were  made  until  1816,  when  England 

tried  to  cut  the  Gordian  knot  by  giving  up  the  attempt  to 

keep  the  coinage  ratio  of  gold  and  silver  the  same  as  their 

market  ratio,  and  by  making  gold  the  only  standard.     That 

this  attempt  has  not  been  wholly  satisfactory  for  all  persons 

in  all  nations,  the  presidential  campaign  of  1896  in  the  United 

States  is  proof. 

The  heavy  expenses  of  the  government  in  foreign  wars,  and 
the  necessities  of  traders,  caused  the  foundation,  in  1694,  of 
the  Bank  of  England,  which  has  remained  to  this  day.  By 
this  "FanF  Targe  stores  of  gold  and  silver,  that  had  formerly 
lain  in  the  hands  of  individuals  and  had  been  loaned  to  trad- 
ers chiefly  through  the  agency  of  private  firms  of  goldsmiths, 
were  collected  and  made  a  permanent  fund  from  which  both 
the  government  and  private  persons  could  borrow.  With 
large  reserves  of  gold  in  its  vaults,  and  with  the  active  support 
of  the  government  guaranteed,  the  bank  soon  issued  paper 
promises  to  pay,  in  the  form  of  bank  notes,  which  hencefor- 
ward furnished  a  more  convenient  medium  of  exchange  than 
Englishmen  had  ever  before  known.  During  most  of  the 
time  since  their  first  issue  these  notes  have  been  exchangeable 
on  demand  at  their  face  value  for  coin.  When  they  were  not 
so  exchangeable,  it  was  for  the  reason  that  they  had  been 
issued  too  far  in  excess  of  the  coin  that  was  in  reserve.^ 

In  literature,  this   period   included  the  Eliza- 


f-^^  Servants,      i^gf^i^g^j-^  -^vritcrs,  the  contemporaries  of  Milton,  j 


Pope,  and  Dryden,  and  the  companions  of  Addison.     The 

'Cunningham  and  McArthur,  p.  147. 
=The  same,  pp.  148-150. 


THE   DOMESTIC   PERIOD   IN  ENGLAND  103 

Keformatiou  ended  the  long  allegiance  of  England  to  Eome, 
Puritanism  grew  up,  and  toward  the  close  of  the  period 
Methodism  inaugurated  a  gi'eat  religious  and  philanthropic 
revival.  Newspapers  were  started,  the  first  English  novel  was 
written,  and  lEe  era  of  modern  science  and  invention  was  on 
the  threshold  pf  realization.  Among  statesmen,  Wolsey,^:T,  JliJ' . 
i-Z-v-v^Val^Ie,  and  A^'iTRam  ritt  may  be  named.  The  Renaissance 
was  one  not  only  of  literature  but  of  a  larger  life  on  all  sides 
for  the  upper  classes.  Xotwithstanding  this,  the  condition  of 
the  masses,  even  near  the  close  of  the  period  during  the  days  of 
William  Pitt,  is  described  by  Mr.  Green^  in  these  words :  "At  the 
other  end  of  the  social  scale  lay  the  masses  of  the  poor.  They 
were  ignorant  and  brutal  to  a  degree  which  it  is  hard  to  con- 
ceive, for  the  increase  of  population  which  followed  on  the 
gi'owth  of  towns  and  the  development  of  commerce  had  been  j 
met  by  no  effort  for  their  religious  or  educational  improve-  ! 
ment.  Xot  a  new  parish  had  been  created.  Schools  there 
were  none,  save  the  grammar  schools  of  Edward  and  Eliza- 
beth, and  some  newly  established  'circulating  schools'  in  'Wales, 
for  religious  education.  The  rural  peasantry,  who  were  fast 
being  reduced  to  pauperism  by  the  abuse  of  the  poor  laws,  were 
left  Avithout  much  moral  and  religious  training  of  any  sort." 

Clearly  the  services  of  statesmen,  writers,  the  clergy,  and  of  | 
teachers  were  not  yet  enlisted  ideally  in  the  cause  of  human  I 
life  as  such.  Visions  of  economic,  naval,  military,  and 
national  greatness  floated  before  the  eyes  of  the  leaders  of  the 
servant  class  in  England,  but  their  eyes  were  yet  blinded  to 
the  ideal  of  an  abundant  human  life  for  every  human  being. 
Personal  and  domestic  servants  must  be  included  at  least  by 
implication  in  the  section  on  "Laborers." 

During  the  fifteenth  and  the  sixteenth  century 

Dependents.'  ^^^^^  ^^^  uufortunatc  poor  and  unworthy  beggars 

gi-eatly  increased.     Responsibility  for  the  care  of  the  poor  bad 

'Green  (J.  R.),  Short  History  of  the  English  People,  ch.  x— I'^'^n, 
Harper  Brothers,  New  York. 
^Ashley,  vol.  II,  pp.  339,  3.^3-350. 


104  OUTLINES  OF  INDUSTRIAL  HISTORY 

been  laid  upon  local  charity  in  general,  and  careless  giving 
was  the  result.  There  was  no  means  of  uniting  the  efforts  of 
different  persons  and  institutions.  It  therefore  became  easy 
for  a  man  who  did  not  choose  to  work  to  live  without  it. 

j      At   the  same   time,  many  honest   persons   suffered   much 

'  because  only  those  who  begged  were  helped.  Eviction  from 
manors,  the  suppression  of  monasteries  by  Hem'y  VIII. 
(1509-1547),  the  difficulty  of  finding  and  keeping  employment 
in  those  transforming  industries  that  now  sent  their  products, 
not  to  a  well-known  and  steady  local  market,  but  to  a  distant, 
unknown,  and  fluctuating  foreign  market,  and  the  great  trains 
of  "idle  and  loitering  serving  men  whom  wealthy  gentlemen 
carried  about  with  them  at  their  tails"  tended  all.  the  time  to 
swell  the  army  of  dependents.  Certain  it  is  that  for  one  cause 
and  another,  the  sixteenth  century  found  the  problem  of  its 
dependents  a  jierplexing  one. 

Accordingly,  a  long  series  of  legislative  acts  which  were 
summed  up  in  the  Elizabethan  Statutes  of  1001  attempted  to 
deal  with  the  problem.  The  dependents  who  could  not  work 
were  to  receive  treatment  different  from  that  given  to  those 
who  could  work.  The  first  were  to  be  supported,  not  by 
indiscriminate  gifts,  but  from  compulsory  poor-rates  in  the 
hands  of  parish  officers.  The  able-bodied,  whether  willing  or 
unwilling  to  work,  were  to  be  given  work  by  the  same  local 
officers. 

No  longer  was  each  man  a  member  of  a  compact  feudal  com- 
munity whose  reciprocal  services  and  wealth  provided  for  each 
one's  want.  Men  had  become  more  nearly  free  in  tlieory,  biit 
many  of  them  were  finding  the  task  of  getting  a  living  one  of 
gi'owing  uncertainty.  This  is  the  problem  which  law-makers 
have  had  to  face  from  a  time  before  Elizabeth  (1558-1603), 
and  it  has  not  yet  found  a  complete  solution:  "How  can  we 

I  have  a  working  class  of  free  men,  who  shall  yet  find  it  easy  to 

I  obtain  sustenance?"  ^ 

^Toynbee,  Lectures  on  the  Industrial  Revolution  in  England, 
pp.  98,  99—1884,  Rivingtons,  London. 


THE  DOMESTIC  PERIOD   IN  ENGLAND  105 

Society:  The  When  Englishmen  had  fah'ly  begun  to  make 
Breakdown  of  gj^^j^  ^^  home,  instead  of  to  export  raw  wool, 
Regulations.  ^^^  Merchant  Adventurers  pushed  its  sale  to 
Venice,  Prussia,  Denmark,  to  the  shores  of  the  Black  Sea,  . 
and  even  to  the  great  Eussian  Fair  at  Novgorod  J;  Accord- ■ '^■(■'-'-^ 
ingly,  what  has  been  described  as  the  Domestic  System  of 
manufacture  grew  up.  The  traders  and  master  craftsmen 
within  a  gild  desired  to  avail  themselves  of  the  services  of 
"workmen,  both  in  town  and  country,  w^ho  were  not  members 
of  the  gild,  in  order  to  have  as  much  cloth  as  possible  to  sell 
in  this  great  new  foreign  market.  The  skilled  workers  within 
the  gild  suffered  from  this  invasion  of  their  monopoly  of 
work.  Manufacturers  in  any  part  of  England  who  could 
produce  cloth  the  cheapest,  inevitably  tlu-ew  into  confusion 
the  wage  scale  of  all  their  more  conservative  competitors. 
The  great  mass  of  workers  not  members  of  any  gild  in  towns, 
and  rural  workers,  in  hours  and  seasons  of  leisure  from  their 
farming,  strove  with  each  other  for  an  opportunity  to  do  a 
little  spinning  and  weaving  regardless  of  apprenticeshi])  and 
authorized  conditious  of  labor.  Therefore  the  minute  gild 
regulations  respecting  number  of  apprentices,  length  of 
apprenticeship,  place  of  work,  length  of  the  Avorking  day, 
amount  of  wage,  etc.,  Avere  often  evaded  or  openly  dis- 
regarded. The  industry  had  become  too  large  and  too 
headstrong  to  be  di'iven  in  any  such  harness  of  strings 
as  the  trade  rules  of  a  single  town.  Nothing  weaker  than 
the  national  authority  could  longer  control  the  woolen 
industry. 

Society:  suiior-  Under  the  stress  of  slowly  working  economic 
\  Town" to  the  forccs  Combined  wlth  great  changes  in  national 
Nation.  policy  whicli  will  soon  be  mentioned,  the  eco- 
nomic and  political  independence  enjoyed  by  towns  in  the 
fourteenth  and  fifteenth  centuries  rapidly  gave  way  in  the  six- 
teenth.    The  town  as  a  unit  of  industrial  control  gave  way 

>Green  (A.  S.),  vol.  I,  p.  53. 


106  OUTLINES  OF  INDUSTRIAL  HISTORY 

to  the  nation.     "Town  economy"  ^  gave  place  to  "national 
economy." 

ToAvns  had  made  so  many  intertown  agreements  about 
trade  that  no  one  of  them  controlled  its  own  trade  as  formerly. 
Manufacture  had  escaped  from  the  gild  control  into  the 
country  villages  and  farmhouses,  and  towns  were  giving  up 
the  "survey  of  victuals,"  and  town  purchases  of  food  for  the 
inhabitants,  thus  throwing  the  individual  more  on  his  own 
resjwnsibility  in  the  task  of  getting  a  living.^ 

The  Tudor  sovereigns  (1485-1603)  also  made  the  represent- 
atives of  towns  in  Parliament  more  like  local  officers  to  carry 
out  the  royal  will  than  real  representatives  whose  purpose 
was  to  get  Parliament  to  do  what  the  towns  willed. 

"Under  the  new  conditions  the  individual  life  of  the 
borough  ceased  to  have  the  same  significance  as  of  old,  and  an 
era  opened  in  which  its  highest  destiny  was  to  be  employed 
as  an  instrument  of  the  royal  will  for  national  ends,  and  its 
only  glory  lay  in  forming  one  of  the  members  of  a  mighty 
commonwealth. '  '^ 

From   the    time   of    Richard   II.    (1377-1399) 

.Society:     The  .  ,  ,        .    .  ,       , 

National  national  authorities  seem  to  have  hud  more  or 
less  of  an  idea  that  English  industry  as  a  whole 
should  result  in  an  increasing  store  of  bullion — gold  and  silver. 
As  England  did  not  possess  mines  of  precious  metals,  this 
bullion  must  therefore  come  from  foreign  trade.  And  it  could 
come  from  foreign  trade  only  on  condition  that  English 
merchants  sold  abroad  more  goods  than  they  bought.  As 
other  nations  also  sought  to  do  the  same  thing,  not  much 
headway  was  made  until  a  method  was  worked  out.  This 
method  sprang  from  the  theory  that  England  might  buy 
as  many  goods  as  she  chose  abroad,  provided  she  would  sell 

iSchmoUer,   The  Mercantile    System,   pp.  1-47— Economic  Classic 
Series  edited  by  Ashley— 189G,  The  Macmillan  Co.,  New  York. 
^Ashley,  vol.  II,  pp.  42-54. 
^Green  (A.  S.),  vol.  II,  p.  448. 
^Cunningham  and  McArthur,  pp.  130-133  and  following. 


THE   DOMESTIC  PERIOD   IX  ENGLAND  107 

them  again  for  a  surplus ;  or  she  might  buy  raw  material 
abroad,  manufacture  it  in  England,  and  sell  the  product 
abroad  for  another  sm-plus.  Thus  manufacture  and  foreign 
trade  were  more  productive,  from  the  point  of  view  of  the 
nation  as  a  whole,  than  the  extractive  industries,  because  the 
net  result  of  the  former  to  the  nation  might  be  an  increased 
store  of  gold  and  silver.  This  theory  of  the  productivity  of 
manufacture  and  foreign  trade  is  usually  called  mercantilism. 

Another  idea  which  went  with  mercantilism  was  that,  even 
if  agriculture  did  not  result  in  an  increase  of  gold  and  silver, 
an  adequate  food  supply  raised  in  England  was  necessai'y  to 
make  the  nation  independent  of  other  nations,  and,  therefore, 
agriculture  too  must  be  encouraged. 

The  nation  must  become  great,  and  able  to  act  independ- 
ently of  other  nations.  To  this  end  money  must  be  stored 
lip  and  agriculture  stimulated,  so  as  to  furnish  an  abundant 
food  supply.  To  the  end  that  gold  and  silver  might  flow  in, 
manufacture,  foreign  trade,  and  all  industries  that  directly 
promoted  manufacture  and  foreign  trade  must  be  encouraged. 

This  was  the  national  program  of  successive  rulers  during! 
most  of  the  time  from  Henry  VII.  (1485-1509)  to  George  III. 
(17G0-1820).     All  industries  of  individuals,  companies,  and 
colonies,  which  seemed  to  interfere  with  this  program  were 
rigorously  repressed. 

The  encouragement  of  English  agriculture  by  the  Corn 
Bounty  Act  of  1689  and  by  the  Corn  Laws  of  1773;  the 
encouragement  of  English  trade,  shipping,  and  sailors,  by  the 
Navigation  Acts  of  1(351  and  1G60;  and  the  continual  discour- 
agement of  American  manufacture,  shipping,  and  transpor- 
tation; find  their  fundamental  explanation  when  considered 
as  illustrations  of  this  great  national  purpose. 

let  •   Sum-  ^^  *'^®  beginning  of  the  period,  industry  con- 
inaryof       tiiiucd    to     bc    irregularly   su])ervised    by   the 

National  Ad-  o  j  i  j 

▼ance  During   national  authority,   chiefly  at  the  dictation  of 

I'eriod.       local  need  and  in  accordance  with  the  personal 

devices  of  the  Crown    for  raising  revenue.     All  trade  and 


108  OUTLINES  OF  INDUSTRIAL  HISTORY 

manufacture  were  considered  to  be  proper  subjects  of  practical 
control  by  pett}^  regulations  of  various  fraternities,  themselves 
under  the  control  of    isolated  town  authorities.      But  long 
s  before  the  end  of  the  period  all  industry,  including  agricul- 

y  ture,  transportation,  and  many  services,  had  been  spurred, 

curbed,  and  turned  to  right  and  left  by  national  authority  for 
the  sole  purpose  of  securing  a  supposed  advance  in  national 
welfare. 

Parliament  was  for  a  while  eclipsed  by  the  personality  of 
the  Tudor  sovereigns  (1485-1603),  but  at  length  asserted  its 
supremacy  by  beheading  Charles  I.  (1625-1610),  deposing 
James  II.  (1685-1688),  crowning  William  and  Mary  (1689- 
1703),  and,  as  1776  drew  near,  by  so  insisting  on  its  superi- 
ority to  colonial  legislatures  in  America  as  to  hasten  the  war 
for  independence. 

Finally)  when  Henry  VII.  became  king,  in  1485,  the  towns 
had  not  yet  .become,  in  fact,  subordinate  to  the  national 
authority  in  a  great  number  of  most  important  economic  and 
political  functions,  but  jii„,1760,  when  George  III.  was 
crowned,  not  only  had  England\}3ecome  a  centralized  power 
within  itself  and  become  united  with  Scotland,  but  Wolfe  had 
just  crowned  the  enterprise  and  daring  of  English  colonists  by 
wresting  the  control  of  North  America  from  the  hand  of  the 
French  commander  Montcalm  on  the  Heights  of  Abraham, 
and  Clive  had  recently  begun  "the  Empire  of  England  in  the 
East"  by  his  great  victory  at  Plassey.^ 

A  gi'eat  confiscation   of  the   lands  held  by  the 

monasteries  followed  their  suppression  by  Henry 

VIII.     These  estates,   together  with  many  of  the  personal 

estates  of  the  king,  were  bought  up  by  the  wealthy  traders. 

Thus  a  great  accession  was  made  to  the  landlord  class  from 

3,A,«.^«^^^^^6  hitherto  socially  inferior  middle  classes,^ 

Under  Charles  II.  (1660-1685)  also,  the  old  feudal  conditions 
of  military  service  were  ended,  and  for  all  free-holders  feudal 

iGreen(J.  R.),  P-  754. 
^Garnier,  vol.  I,  p.  27. 


THE  DOMESTIC  PERIOD  IN  ENGLAND  109 

tenancy  was   conTerted  for  all  practical  purposes  into   fuir\ 
ownership.^     Successors  to  the  old  feudal  tenants  were  like- 
wise becoming  as  secure  in  their  tenancies  as  if  they  were  , 
absolute  owners." 

Unrestricted  right  to  dispose  of  land  did  not  exist,  but  the 
use  and  enjpyment  of  it  became,  during  this  period  as  never 
before,  a -mere  matter  of  contract,  unhampered  by  feudal  cus- 
tom. The  men  who  could  pay  the  most  money  could  hence- 
forth practically  own  a  piece  of  land.  In  such  a  contest  a 
relatively  small  number  of  men  came  to  own,  so  far  as  Eng- 
lish laws  allowed  ownership,  all  the  land,  just  as  under  the 
feudal  system  there  was  a  comparatively  small  number  of  lords 
of  manors.  But  there  was  now  this  difference.  Under  the 
newer  form  of  holding  land  all  not  owners  in  this  partial  sense 
had  to  make  a  further  bargain,  in  competition  with  everybody 
else  who  wanted  land,  for  a  chance  either  to  cultivate  or  to 
live  upon  it.  Under  the  older  form  nearly  everybody  had 
by  custom  enough  land  upon  which  to  live,  and  usually  also 
some  land  to  cultivate. 
I  y  During  this  period  capitalistic  production  was  of 

l/^     CapitaUsts.       .  .  .  „.  e       l\  '        £      l 

increasing  importance.  bigns  of  this  fact 
abound.  Larger  investments  were  required  for  the  herring 
fleet  and  for  the  distant  cod-fisheries  of  Newfoundland. 
Large  sheep-farms  could  joasture  hundreds  and  even  thousands 
of  sheep.  (In  1534,  Parliament  forbade  any  one  man  to 
keep  more  than  two  thousand  sheep. ^)  The  iron  and  coal 
mines  also  required  a  greater  outlay  in  tools  and  auxiliary 
material,  as  they  were  more  extensively  worked.  Coaches  and 
carts  and  shipping  for  transportation  meant  capitalistic  invest- 
ment as  a  rule.  Tlie  same  was  true  of  canals.  The  traders  also 
made  investments  in  goods  which  were  carried  by  caravans  and 

'Siito,  History  of  the  Land  Question  in  the  United  States,  p.  15 
— Jolins  Hopkins  University  Studies,  4th  series,  1S8C. 

^Pollock,  The  Land  Laics,  p.  49— English  Citizen  series,  1883, 
The  Macmillan  Co.,  New  York. 

'Ashley,  vol.  II,  p.  268. 


110  OUTLINES  OF  INDUSTRIAL  HISTORY 

sailing  vessels  to  distant  lands,  so  tliat  returns  on  the  invest- 
ments were  dela3'ed  for  months  and  sometimes  years. 

These  examples,  and  many  more  that  might  be  given, 
should  serve  to  make  clear  the  fact  that  caj)it.al  was  playing  an 
increasingly  important  pai't  in  the  production  of  this  period. 
As  a  consequence,  therefore,  an  increasing  number  of  men  and 
Avomen  were  becoming  dependent  upon  those  who  had  capital, 
for  a  chance  to  work. 

The  loan  funds  of  the  time  were  also  greatly  increased  and 
concentrated  in  the  Bank  of  England.  Thus  borrowing,  both 
for  productive  purposes  and  for  luxurious  living,  yes,  even  for 
vice  and  war,  became  easier.  In  these  loan  funds  way 
gradually  developed  the  power  of  the  nation  and  of  its  great 
traders,  to  turn  the  energies  of  large  bodies  of  men  quickly  in 
this  direction  or  in  that  as  the  political  exigencies  of  the  time 
or  the  possibilities  of  economic  gain  required. 

Aj'-easonable  interest  on  such  funds,  even  where  the  lender 
did  not  become  a  partner  in  the  enterprise  and  therefore  a 
sharer  in  the  risk,  was,^  during  the  sixteenth  century,  for  the 
first  time  thought  by  English  religious  teachers  to  be  right.' 
With  the  increase  in  the  importance  of  capital  in 
the  form  of  tools,  of  transportation  facilities,  of 
raw  materials,  of  finished  products  (lacking  only  the  addition 
of  time  and  place  utilities  before  they  became  consumer's  goods 
in  the  possession  of  consumer),  and  with  the  increase  ot 
capital  in  the  form  of  loan  funds,  the  economic  importance  of 
undertakers  was  also  becoming  greater  during  this  period.  Just 
so  far  as  the  various  processes  of  the  textile  manufactures  were 
divided  up  and  assigned  to  different  groups  of  workers,  was 
the  function  of  the  undertaker  necessary  to  unify  the  different 
])artial  processes  into  one  continuous  and  well-adjusted  com- 
plete process  of  mamifacturing  an  article  for  the  consumer's 
need.  Just  so  far  as  the  capital  invested  was  large,  markets  ; 
jdisjtant_andjincertain,  loan  funds  available  for  great  under- 
takings, and  prizes  possible  to  the  enterprising  and  successful 

'Ashley,  ch.  vi. 


THE   DOMESTIC  PERIOD   IN   ENGLAND  111 

irader, — so  far  was  the  special  ability  of  the  undertaker  nec- 
essary to  trade.  And,  finally,  it  was  to  the  far-sighted  under- 
takers, who  saw  what  facilities  for  the  transportation  of  coal 
and  other  heavy  commodities  would  do  for  England,  that  the 
inauguration  of  the  great  system  of  canals  was  primarily 
due.  Plainly  enough  the  industrial  undertakers  had  already 
begun  to  direct  that  combination  of  ''natural  resourceSjV" 
labQX*  and  that  storage  battery  of  human  energy  which  is; 
formed  by  the  union  of  land  and  labor,  and  is  calledHcapital,| 
which  was  to  be  so  remarkable  during  the  nineteenth  century.*' 
Directed  '^^^^  most  Significant  fact  about  the  common 
Workers,  laborers  of  this  period  is  probably  that  money 
wages^were  becoming  universal.  The  method  of  determining 
these  wages,  however,  had  not  yet  become  so  impersonal,  so 
purely  competitive,  so  absolutely  regardless  of  any  relation 
between  employer  and  employed  except  the  "Cash  Nexus,"  as 
Carlyle  calls  it,  as  has  been  the  rule  during  the  period  of  the 
Factory  System.  Wages  had  all  along  been  affected  by  societ;^i 
through  custom,  by  regulations  of  gilds,  by  town  ordinances,! 
by  national  statute,  and  by  local  justices  of  the  peace.  Often 
too,  no  doubt,  these  interferences  with  the  wage-contract  were 
dictated  by  the  employers  for  their  own  welfare  rather  than  by 
the  wage-workers  for  the  av  elf  are  of  the  laborer.  Still, 
employers  and  employed  were  commonly  neighbors,  and  the 
number  of  employees  of  any  one  man  was  small,  so  that  it  was 
usually  possible  for  him  to  know  them  all  personally.  If  a 
workman's  family  Wiis  sick  and  in  distress  the  employer  was 
likely  to  know  of  it.^  Some  compensation  through  personal 
relations  was  therefore  possible  lor  the  frequent  unfairness  in 
wages. 

As  the  wage  system  grew  up  in  England,  to  take  the  place 
of  the  old  feudal  relations  between  persons  and  to  make  men 
personally  free,  the  bonds  of  personality  were  yet  strong  so 
long  as  employer  and  employed  were  permanent  members  of 
the  same  community.     But  this  primitive  form  of  the  wage 

'Taylor,  p.  37. 


112  OUTLINES  OF  INDUSTRIAL  HISTORY 

system  was  now  breaking  np  to  the  extent  that  the  Domestic 
System  of  industry,  with  its  uncertain  markets,  capitalistic 
production,  and  competing  undertakers,  was  gaining  a 
dominant  place  in  the  various  industries  of  the  time.  In  the 
woolen  industry,  and  the  textile  industries  in  general,  we  have 
seen  this  domination  to  be  well-nigh  complete,  while  in  many 
other  industries  it  was  still  only  partial.  The  wage  system 
had  become  common,  and  the  way  was  already  open  for  its 
complete  development  on  strictly  competitive  lines  just  as 
soon  as  the  introduction  of  the  Factory  System  of  industry 
should  render  such  development  necessary  to  the  greatest  suc- 
cess of  tlie  capitalistic  employer. 
The  Right  of    In  Other  kinds  of  property  than  land  the  gradual 

Private  Prop-  ,  .  «i  i,./ 

erty  and  Free-  emancipation   of   the   person   of  the   serf    has 

dom  of  .-,,,.  .  .  .  .  , 

Contract,  camcd  With  it  ail  increasing  security  in  the 
possession  of  jiroperty^__  Magna  Charta  contained  only  one 
safeguard  for  the  property  of  a  villein,^  and  the  safeguards  for 
the  property  of  freemen  were  rather  negative  than  positive — no 
"scutage"  or  "aid"  was  to  be  taken  except  for  definite  purposes, 
but  by  implication  certain  other  dues  not  specified  might  be 
taken.2  When  Edward  I.  (1272-1307)  confirmed  the  Charter 
in  the  closing  years  of  the  thirteenth  century,  this  liability 
of  property  to  arbitrary  taxation  by  the  king  was  greatly 
restricted  and  made  dependent  upon  the  will  of  Parliament. 
Other  steps  toward  freeing  property  from  the  danger  of  arbi- 
trary taxation  were  taken  during  the  memorable  struggle 
between  Charles  I.  and  Parliament,  and  again  when  William 
and  Mary  became  king  and  queen  by  act  of  Parliament  in 
1689.  In  theory,  henceforth,  all  interference  with  private! 
/} property  and  contract  was  to  be  in  accordance  with  the  willi 
1'  of  the  people,  as  expressed  by  their  representatives  in  Par- 
liament.     What   classes    of    the   people   were    dominant   in 

^Stubbs,    Select    Charters,   p.   299  —  1870,    The  Clarendon  Press, 
London. 
'The  same,  sections  12,  20,  28-32,  38-40,  of  Magna  Charta. 


THE   DOMESTIC   PERIOD   IN  AMERICA  113 

Parliament,  therefore,  was  of  fundamental  importance  in  con- 
nection with  the  question  of  taxation  of  private  property  and 
interference  with  individual  contracts. 

How  agriculture,  shipping,  trade — all  industries  considered 
important — were  stimulated,  held  back,  and  turned  into  new 
channels  by  the  mercantilist  policy  of  Parliament  to  build  up 
a  great  national  power  has  already  been  suggested.  When 
this  policy  is  recalled  to  mind  now  it  will  be  seen  at  once  how 
dependent  upon  society  in  the  form  of  the  national  govern- 
ment individuals  were,  in  respect  to  the  value  of  their  prop- 
erty, and  the  conditions  of  their  making  business  contracts 
with  each  other. 

In  theory,  all  Englishmen  had  become  able  to  liold  private 
property,  in  everything  except  land,  with  the  three  implica- 
tions of  use,  enjoyment,  and  alienation.  In  practice,  the 
economic  policy  of  the  government  often  caused  a  violent 
interference  with  each  phase  of  this  right. 

In  addition  to  the  contracts  which  result  from  the  right  to 
dispose  of  one's  property  in  goods,  or  to  buy  the  goods  of 
another,  is  the  wage  contract.  In  theory  this  was  still  subject  to 
regulation  in  a  given  locality  by  the  officers  named  by  Parlia- 
ment, but  in  jwactice  it  was  coming  more  and  more  to  ])G  left 
to  employers  and  employees  themselves. 

"^  AMEllICA 

Limits  of  the  As  English  colonization  of  America  did  not 
begin  in  earnest  until  1007  in  Virginia  and  1020 
in  New  England,  it  will  bo  seen  at  once  that  the  Domestic  '(r^^^_ 
System  of  industry  could  not  have  begun  so  early,  by  at  least -^'^-'^  ^ 
a  liundred  years,  in  America  as  in  England.  On  the. other 
hand,  it  did  not  give  place  to  the  Factory  System  so  early  as 
in  England,  partly  on  account  of  adverse  English  legidation. 
Perhaps  the  most  convenient  limit  for  our  present  purpose 
will,  therefore,  be  the  beginning  of  our  national  life  under  the 
Constitution  in  17S9. 


114  OUTLINES  OF  INDUSTRIAL  HISTORY 

During  this  period  the  thirteen  colonies  were 

^in^c?ias"of  ■  plf^-nted  upon  the  Atlantic  margin  of  the  con- 

%»ttvard\w-'^  tinent.    IIow  they  struck  their  roots  into  the  soil, 

^setti*e1-8?^^     developed  local  democratic  institutions,  became 

conscious  of  each  other's  presence  and  of  their 
common  relations  to  England ;  how  they  helped  England  to  con- 
quer France;  and  how,  at  length,  they  drew  closer  together, 
and  by  the  aid  of  this  same  France,  won  their  political  inde- 
pendence ; — all  this  has  been  a  familiar  tale  at  every  American 
fireside  for  more  than  a  hundred  years.  By  1790,  therefore, 
the  scouts  of  the  westward  moving  army  of  settlers  had  passed 
beyond  the  lower  waterfalls  of  the  Atlantic  rivers,  where  they 
had  first  paused,  had  been  overtaken  by  detachments  from 
the  main  body  of  settlers  upon  the  tablelands  of  the  eastern 
Appalachian  slopes,  and  had  pushed  on  over  the  mountains  and 
down  the  Ohio  Eiver.  Parts  of  vrhat  is  now  Tennessee,  Ken- 
tucky, Ohio,  Indiana,  and  Illinois  were  thus  early  familiar  to 
these  pioneers.  Indeed,  one  of  the  least  known  but  most  thrill- 
ing and  important  campaigns  of  the  whole  Revolutionary  War 
was  that  of  George  Eogers  Clark  of  Virginia,  who  gained  from 
the  British  for  the  United  States  a  title  to  the  whole  Northwest 
Territory  by  his  brilliant  conquest  of  Kaskaskia  and  Cahokia 
upon  the  Mississippi,  and  Fort  Vincennes  upon  the  Wabash.^ 
In  1790  the  first  national  census  was  taken  and  the  popula- 
tion found  to  be  3,929,214,  about  the  number  now  living  in 
the  city  of  Greater  New  York,  Of  these  only  about  three  and 
one-third  per  cent  lived  in  towns  or  cities  of  8,000  inhabit- 
ants. The  most  thickly  settled  areas  were  those  along  the 
lower  slopes  of  navigable  rivers. 

Up  to  the  time  of  the  Eevolution,  all  land  titles 

in  the  Colonies,  as  in  England,  had  their  legal 
source   in    the    Crown.      In  practice    those  individuals  and 

'Turner.  Compare  also  Hart,  American  History  Told  by  Con- 
teviporaries,  vols.  I  and  II — Longmans,  Green,  &  Co.,  New  York. 

-Roosevelt,  The  Winning  of  the  West.  vol.  II,  chs.  ii,  lii — 1889- 
1896,  G.  P.  Putnam's  Sons,  New  York. 

8Sato. 


THE  DOMESTIC  PERIOD   IN  AMERICA  115 

groups  of  individuals  who  could  maintain  themselves  against 
the  Indians  and  appropriate  certain  areas  for  their  own  use 
were  not  usjualjjiJntRrferod  wjth.  "In  all  the  colonies  lands 
were  clieap  and  the  actual  occuj)ant  or  settler  was  preferred 
and  protected."^  As  a  rule,  this  process  was  facilitated  by 
certain  companies  and  proprietors  to  whom  various  sovereigns 
had  given  charters^  often  duplicate,  to  vast  areas  of  land. 
"All  the  royal  charters,  beginning  with  the  charter  to  the 
Virginia  Company  inNlGOG  and  ending  with  that  granted  to 
the  trustees  of  Georgia  in^l732,  granted  lands  in  free  and  com- 
mon socage,  that  is,  in  free  tenure  without  military  service^'  ^ 
Sometimes  the  payment  in  return  for  these  grants  was  a  price 
once  for  all,  as  in  the  case  of  Penn;  sometimes  it  was  a  rent; 
and  sometimes  a  share  in  profits.  "Profits,  however,  there 
were  none,  and  rents  were  small.  "^  But  whether  the  occu- 
pancy of  the  land  by  individuals  was  authorized,  for  a  nominal 
return,  directly  by  the  Crown,  by  the  original  companies,  by 
proprietors,  by  later  municipal  or  colonial  authorities,  or  sim- 
ply was  gained  from  the  Indians,  as  in  the  case  of  settlers  in 
Connecticut  and  Phode  Island,  the  fundamental  fact  was  that 
a  continent  of  unappropriated  land  invited  settlement,  and 
possession  becanie  more  than  nine  points  in  the  law . 

The  settlers  were,  as  a  rule,  free  men;  and  the  practical 
ownership  of  as  much  land  as  they  could  work  was  easy. 

"In  1G51  it  was  enacted  that  all  colonies  should 
^rHiITmhfstr'i'af  ^^port  Only  to  England  such  products  as  they  had 

i.cRiHiation     to  ggu    and  should  send  them  in  English-built 

*io5i-i76o'."  '^l^ips-      In  IGGO  the  import  trade  was  similarly 

limited.    In  1672  taxes  were  imposed  on  the  trade 

between  the  different  colonies.     In  1G07  the  exportation  of 

wool,  yarn,  or  woolen  manufactures  to  any  place  whatever 

'Donaldson,  The  Public  Domain,  Its  History,  with  Statistics,  p. 
467—1884,  U.  S.  (Jovernment  Publications. 

=Sato,  p.  16. 

'Hinsdale,  TJie  American  Government,  p.  26— 2d  ed.,  1895,  The 
Werner  School  Book  Co.,  Chicago. 

*The  same, 


116  OUTLINES  OF  INDUSTRIAL  HISTORY 

v/as  prohibited.  In  1719  the  House  of  Commons  condemned 
'all  American  manufactures  as  tending  to  independence.  In 
1732  the  exportation  of  hats  was  forbidden;  and  in  1750 
rolling  mills,  iron  furnaces,  and  forges  were  declared  nuisances 
to  be  suppressed  by  the  colonial  governors.  The  finest  pine 
trees  in  the  forests  were  marked  with  the  'broad  arrow,' 
denoting  that  they  had  been  selected  as  masts  for  the  King's 
ships,  and  that  they  m.ust  not  be  cut  by  the  lumbermen. 
Even  Lord  Chatham  said  that  in  a  probable  contingency  he 
would  not  allow  the  colonies  to  make  a  hobnail."  ^ 

How  the  attempt  at  rigid  enforcement  of  these  and  similar 
laws  after  1760  directly  hastened  the  struggle  for  independ- 
ence, is  more  than  a  twice-told  tale.  But,  previous  to  1700, 
however  repressive  in  intention,  it  is  doubtful  if,  on  the 
whole,  they  did  mmch  to  retard  the  development  of  colonial 
manufacture  and  trade  that  might  otherwise  have  taken 
place.  Still,  against  such  a  background  of  adverse  econom.ic 
legislation  the  whole  industrial  life  of  the  period  must  be 
drawn. 
K/^'^xtractive  In-  lentil  within  a  decade  or  two  there  has  been  a 
^andorkSng^  frontier  in  this  country,  roughly  separating 
Animais.2  jf^^ds  belonging  to  Indians  upon  the  west  and 
the  most  advanced  permanent  white  settlements  upon  the 
east.  Beyond  this  frontier  the  fur  dealer  pioneered  his  way 
along  water  courses  and  Indian  trails  to  barter  all  kinds  of 
goods  dear  to  the  Indian  heart  for  the  valuable  furs  which 
,  the  Indian  knew  best  how  to  secure.  This  frontier  has  been 
utilized,  since  long  before  the  close  of  the  eighteenth  century, 
for  grazing  large  herds  of  cattle  and  horses.  In  early  times 
this  was  especially  true  on  the  western  frontier  of  the  south- 
ern states,  Virginia  and  the  Carolinas.  The  lack  of  large 
markets   during  the   eighteenth   century  set  a  limit  to  the 

'Hinsdale,  pp.  59,  60. 

-For  a  populai-  account  of  the  industrial  life  of  one  hundred 
years  ago,  see  McMaster,  Century  of  Social  Betterment — "The  At- 
lantic Monthly,"  vol.  79,  pp.  20  and  following. 


THE  DOMESTIC  PERIOD  IN  AMERICA  117 

grazing  industry  diu-ing  the  period  now  under  consideration, 
but  fiu's  were  of  so  mucli  importance  for  export  that  the  con- 
test between  France  and  England  for  the  control  of  Xorth 
America  was  to  a  great  degree  occasioned  by  the  desire  of 
each  to  control  this  trade. 

Agi'iculture  for  subsistence,  for  comparatively 
dustries:      Small  llocal  markets,  and  for  export  was  by  far 

Agriculture.  i  .  -^  '' 

the  Dlost  important  industry  throughout  the 
period.  The  small  farms  of  intensive  agriculture  in  the 
north,  and  the  large  estates  of  extensive  agriculture  in  the  south, 
were  typical  for  those  localities.  The  cereals  long  known  in 
England,  also  maize,  tobacco,  the  potato,  rice,  hemp,  flax, 
cotton,  and  the  grasses,  were  the  most  important  crops. 

Methods  of  tillage  were  primitive,  the  art  of  fertilization 
almost  unknown,  and  the  varieties  of  farm  products,  both 
vegetable  and  animal,  as  yet  little  improved  by  culture  and 
breeding.  Yet  so  abundant  was  the  unexhausted  land  that 
in  1791  tliere  were  exported  619,681  barrels  of  flour  and  over 
1,000,000  bushels  of  wheat. ^  T^obacco  was  also  a  constant 
export  product. 

Extractive  In-  Ovcr  most  of  the  territory  settled,  a  reckless 
Lumberin|*and  "slashing  and  burning"  of  timber  had  to  pre- 
Fishine.  gg(jg  agi'iculture.  So  far  as  the  forests  were 
concerned  this  was  an  absolute  waste  which  has  been  repeated 
in  new  sections  of  the  country  until  it  has  become  well-nigh 
criminal.  Lumber  was  also  gotten  out  for  buildings,  for 
native  ships,  and  for  exportation.  So  important  did  the 
export  of  lumber  become  that  "in  1792,  65,816,02-1  feet  of 
lumber,  80,813,357  shingles,  32,039,707  hoops,  staves,  and 
headings  were  exported,  while  of  timber,  consisting  of  ship 
and  other  timbers,  frames  of  houses,  etc.,  large  quantities 
were  sent  out."^  Various  other  products  of  the  forests,  such 
as  pitch,  tar,  and  soap-ashes  also  formed  a  less  important 
class  of  early  exports. 

'Wright,  p.  74. 
"The  same,  p.  Td. 


118  OUTLINES  OF  INDUSTRIAL  HISTORY 

ly  But  the  fundameutal  industry  on  the  New  England  coast 
'  was  fishing,  and  the  most  valutible  of  all  the  fish  taken  was 
the^cod,  which  was  exported  in  great  quantities  to  Catholic 
countries.  We  are  told  that  before  1610,  "the  free  inter- 
course with  the  West  Indies  and  the  Western  Islands,  and  the 
large  trade  with  the  great  Catholic  consumers  of  fish,  had 
developed  a  vigorous  commerce  on  the  shores  of  New  Eng- 
land."^ And  again,  "the  business  of  the  fisheries  enters 
into  all  the  doings  of  the  time."  ^  Finally,  "it  was  recognized 
at  home  that  the  English  fisheries  of  Newfoundland  were  the 
greatest  if  not  the  only  nursery  for  English  seamen.  When 
that  trade  flourished,  it  bred  10,000  seamen  in  a  single  year. 
The  colonial  fisheries  were  performing  a  like  office,  and  were 
training  a  maritime  people  destined  to  acquire  wealth,  and  to 
make  a  navy  which  in  due  season  might  compete  with  the 
royal  power  upon  the  seas."^ 

Iron  was  the  principal  metal  worked  during  the 

Extractive  In- ~  .  \  f     ,  .  ,       .        ,    . 

dustries:      colouial  period,  and  this  was  obtained  in  most 

Mining.  ^ 

of  the  colonies  from  bog-iron  ore,  a  form  of 

ore  that  was  deposited  by  water  in  swamps,  at  the  bottoms 

of  ponds,   etc.     This  was  so  far  utilized  that,  although  the 

colonists  imported  much  iron  and  steel  in  a  form  ready  for 

use,  they  exported  in  1771  over  7,525  tons  of  pig  and  bar  iron.* 

This  product  went  chiefly  to  England,  and  the  tonnage  just 

given  was  the  maximum  for  any  one  year. 

Transforming  As  wc  havc  already  seen,  most  of  the  people  in 

vari^ty'^and    the  colonics  wcre  cultivators  of  the  soil.     As  a 

*  ^^'        rule  these  farms,  plantations,  and  local  groups 

of  whatever  sort  were  also  largely  self-sufficing  in  respect  to 

rud^  mani\factured  axti  "English  manufactures  began 

in  the  home;    there  were  few  dwelling-houses  in  the  rural 

parts  of  England  in  the  seventeenth  century  which  did  not 

»Weeden,  vol.  I,  p.  164. 
-The  same,  p.  247. 
''The  same,  p.  245. 
*  Wright,  p.  101. 


THE  DOMESTIC  PERIOD  IN  AMERICA  119 

contain  a  spinning-wheel  or  a  weaver's  frame.  The  busy 
hum  of  the  one  and  the  measured  rattle  of  the  other  were 
heard  in  nearly  every  household.  How  natural,  then,  to 
expect  to  find  in  the  homes  of  the  Virginians  of  the  same 
l^eriod  men  and  Avomen,  who,  in  many  instances,  had  been 
born  in  the  mother  country,  and  who  clung  to  the  habits  as  well 
as  to  the  traditions  of  their  race — [and]  rude  appliances  for  the 
plainest  manufactures  to  cover  then*  simplest  material  needs."  ^ 
This  household  manufacture  for  home  use  was  especially  /.«.  .^ 
unlikely  in  Virginia,  where  tobacco  could  always  be  traded  iov  '^-f^ 
goods  sent  directly  from  England.  Still  we  ai'e  told  that 
"there  is  no  reason  to  think  that  in  any  year  or  series  of 
j-ears,  however  prosperous,  the  manufacture  of  woolen  gar- 
ments for  rough  domestic  use  fell  into  abeyance.  From  the 
middle  of  the  [seventeenth]  century  to  the  close,  there  are 
few  inventories  of  large  personal  estates  among  the  items  of 
which  wool-cards  and  woolen-wheels  do  not  appear."^  The 
same  authority  enumerates  the  following  kinds  of  manufac- 
ture as  commonly  performed  upon  the  Virginia  plantations : 
carjientry,  joining,  biacksmithing,  coopering,  tanning,  shoe- 
making,  etc.,  in  fact,  nearly  all  of  the  transforming  processes 
absolutely  necessary  to  the  rm-al  life  of  the  time.  In  Vir- 
ginia, however,  all  articles  of  manufacture  other  than  the 
coarsest  and  absolutely  necessary  were  brought  from  England 
in  return  for  tobacco. 

In  New  England,  likewise,  we  are  told  of  the  period  includ- 
ing the  middle  of  the  eighteenth  century:  "Manufactures 
proper,  during  our  present  period,  show  little  that  is  new  or 
interesting  in  their  development.  They  range  in  importance 
from  woolen  homespun  tlirough  rum  and  iron  to  flaxen 
fabrics,  and  a  few  attempts  at  making  vai'ious  necessaries. 
The  manufacture  and  use  of  homespun  woolen  cloth — such  a 
prime    necessity — was    so    thoroughly   incorporated    in    the 

'Bruce,  vol.  II,  pp.  398,  399. 
^rrhe  same,  pp.  468,  469. 


120  OUTLINES  OF  INDUSTRIAL  HISTORY 

domestic  habits  of  the  people  that  its  reh^tive  industrial 
importance  escaped  much  especial  notice."^  These  home 
industries  for  domestic  and  narrowly  local  consumption  were  in 
their  very  nature  ajffected  to  a  minimum  extent  by  adverse 
English  legislation  of  whatever  sort.  In  comparison  with 
manufacture  for  export  they  must  be  thought  of  as  of  mani- 
fold gi'eater  importance  and  value  throughout  the  whole  colo- 
nial period.  Mr.  Wright  makes  the  best  j)ossible  comparison, 
but  yet  says  that  it  is  little  better  than  a  guess.  Still,  such  a 
guess  is  interesting,  and  is  recorded  here  for  what  it  is  worth. 
"Reasoning  from  such  facts  as  are  obtainable,  it  is  probable 
that  the  manufactures  of  the  United  States  at  the  close  of 
the  colonial  period  amounted  to  about  $20,000,000."^  Of 
these  manufactures  Mr.  Wright  estimates  the  value  of  exported 
goods  to  be  about  $1,000,000. 

In  variety,  these  manufactures  were  determined  by  the 
primary  needs  of  colonists  for  food,  clothing,  and  shelter,  of 
slowly  improving  quality  and  variety;  by  a  gradually  increas- 
ing interchange  of  products  between  colonists  in  different 
latitudes  along  the  coast;  and  by  the  minimum  foreign 
market  secured  in  spite  of  adverse  English  legislation. 
'Transforming  Sucli  tools  and  machinery  and  motive  power  as 
Toois.^Maciriu-  wcrc  knowH  in  England  previous  to  the  great 
ery,  jstc.^  ij^yentions  of  the  eighteenth  century  were  known 
and  used  in  the  colonies.  All  tools  and  machines  were  as  yet 
simple  and  usually  made  by  hand.  Most  of  them  were  also 
moved  by  the  human  hand.  Other  motive  i30wer  was  fur- 
nished by  animals,  by  the  Avind,  and  by  the  numerous  streams 
of  the  Atlantic  slope.  Sawniills  were  used  in  the  colonies 
early  in  the  seventeenth  century,  and  became  very  common 
before  its  close.  Local  gristmills  were  common  in  Xew  Eng- 
land long  before  1650.  "In  1619  there  were  five  water  mills 
in  Yhginia,  four  windmills,  and  a  great  number  of  horse  and 

iWeeden,  vol.  II,  pp.  678,  679. 

nVright,  p.  103. 

^Consult  Wright,  chs.  vii  and  viii;  Weeden,  index;  also  Bruce. 


THE  DOMESTIC  PERIOD  IN  AMERICA  121 

hand  mills."  These  rapidly  increased  toward  the  close  of 
the  century,  and  fulling  mills  for  cloth  were  added.  In  New 
England,  during  the  last  quarter  of  the  seventeenth  century, 
"fulling  mills  were  steadily  established  to  di'ess  the  homespun 
cloth." 

Various  machines  and  appliances  for  working  iron  were 
also  introduced  into  many  of  the  colonies  dm-ing  the 
last  half  of  the  seventeenth  century  and  during  the  eight- 
eenth. Furnaces,  forges,  foundries,  rolling,  mills,  nail 
works,  and  wu-o  mills  were  the  most  common,  and  these 
were  found  in  the  largest  numbers  in  Pennsylvania  and 
Massachusetts. 

Printing  presses  and  paper  mills  Avere  gradually  set  up, 
especially  in  Boston  and  Philadelphia.  Cambridge,  Massa- 
chusetts possessed  the  first  colonial  printing  press,  in  1639. 
Georgia  was  the  last  colony  to  begin  printing,  the  first  press 
being  set  up  in  Savannah  in  1762. 

These  larger  mills  and  machines  were  used  in  great  part  to 
supplement  the  work  of  individuals  upon  the  materials 
destined  for  home  consumption.  Illustrations  of  this  are  to 
be  found  in  the  gristmills  which  ground  the  grain  of  a  com- 
munity for  toll,  and  in  the  fulling  mills,  which  performed  a 
similar  service  in  thickening  cloth  spun  and  woven  in  the 
several  homes  and  afterwards  to  be  made  into  garments  by  the 
same  hands. 

Sometimes,  also,  they  were  used  to  furnish  materials  to  the 
home  workers,  as  in  the  case  of  rolling  and  slitting  mills, 
which  rolled  iron  into  sheets  and  then  slit  the  sheets  into 
rods,  which  were  made  into  nails  on  a  hand  anvil  by  many  a 
farmer  on  winter  evenings. 

And,  finally,  these  mills  were  sometimes  the  property  of 
men  who  produced  for  a  market  as  well  as  rendered  assistance 
to  home  industry.  Lumber,  pig  and  bar  iron,  and  potash 
have  already  been  mentioned  as  articles  of  export.  Cloth  also 
was  finally  produced  in  the  older  parts  of  the  colonies  in  such 
quantities  as  to  bo  sent  to  the  frontier. 


122  OUTLINES  OF  INDUSTRIAL  HISTORY 

Transforming  ThesG    scaiitj   illustratioiis   Buggcst    the    main 

The  Domestic  facts  respecting  the  transforming  industries  of 
ystem.  ^j^^  whole  colonial  period.  Almost  the  whole  of 
such  industry  was  of  the  early  type  called  in  Chapter  I  the 
Home  System  of  industry.  Home  productiou^for  bonm_ 
cmisumpiiou  was  the  rule.  Wherever  the  work  of  a  household 
needed  to  be  suj^plemented  by  larger  and  more  expensive 
machines,  a  greater  motive  power,  or  the  cooperation  of  a 
larger  number  of  persons,  this  supplementary  work  was  done 
in  the  immediate  vicinity  of  most  of  the  homes,  sometimes 
under  the  immediate  dkection  of  the  town  authorities  and 
sometimes  by  small  capitalists.  The  same  was  true  of  the 
small  amount  of  manufacture  for  a  mai-ket.  So  far  as  the 
transforming  industries  of  the  time  were  not  for  home  con- 
sumption, they  Avere  characterized  more  nearly  by  the  methods 
of  the  Domestic  System  of  industry  than  by  any  other. 
Spinning,  weaving,  and  making  of  shoes  and  garments  went 
on  in  the  homes  of  the  workers  or  in  the  small  shops  of 
master  workmen.  All  transforming  industries  were  closely 
associated  with  agriculture.  There  was  nn_  P^n'al  gnlP  fiv^fl 
between_.the^  employer — and  the  empl^y^d.  Tools  and 
machinery  were  as  yet  comparatively  simple,  and  did  not 
bring  together  a  large  number  of  persons  or  allow  of  minute 
division  of  labor.  Artisans  in  a  particular  industry  were  too 
few  in  any  locality  to  give  much  opportunity  for  the  elaborate 
gild  regulations  which  had  formerly  existed  in  England. 
The  Gild  System  of  industry  had  no  general  development  in 
America.  So  far  as  there  was  production  for  a  market, 
therefore,  our  industries  passed  at  once  from  the  Home 
System  to  the  Domestic  System,  and  thence  to  the  Factory 
System,  which  remains  to  be  described  in  the  next  chapter. 

Transporta-    Throughout  the  whole  of  this  period  the  trans- 

tion.'         portation   of  most  merchandise  was  by  water. 

This  was  all  the  easier  because  most  of  the  population  lived  near 

the  coast  or  near  the  Atlantic  rivers.     In  Virginia,  boats  often 

'Consult  Weeden,  index;  also  Bruce. 


THE  DOMESTIC  PERIOD  IN  AMERICA  123 

came  from  Eiiglaud  directly  to  the  wharves  of  a  plantation. 
"All  the  maritime  places  had  nimble  trading  shallops  flitting 
about  the  coast."  This  was  in  the  last  half  of  the  seventeenth 
centm'y,  and  must  be  thought  of  as,  in  the  main,  continuous 
throughout  the  period. 

Travel  upon  land  was  all  the  while  comparatively  slow  and 
diflScMlt.  Eoads  were  looked  after  chiefly  by  town  authorities 
which  compelled  the  townsmen  to  work  for  a  certain  number 
of  days  annually — usually  in  proportion  to  their  property — 
upon  the  highways.  Streams  were  at  first  crossed  by  ferries, 
then  by  rude  bridges  for  footmen  and  horses  only,  then,  after 
about  1675,  cart-bridges  became  common.  These  were 
usually  built  by  several  towns  acting  together,  and  later  by 
county  authority;  and  tolls  were  collected  for  passage. 
Boston  had  its  first  coach  in  1609.  At  the  end  of  the  seven- 
teenth century,  "the  post  from  Boston  to  Xew  York  took  one 
week  in  summer ;  in  the  winter  it  went  only  once  in  a  fort- 
night. About  the  beginning  of  the  [next]  century  nearly  all 
the  modern  roads  were  already  laid  out  and  the  use  of  carts 
became  general."  This  applies  especially  to  the  older  and 
more  thickly  settled  parts  of  the  colonies.  "In  the  far  away 
districts,  chaises  were  a  curiosity.  Judge  Paine  passed 
through  Wells,  Maine,  in  one  in  1755.  All  the  village 
thronged  to  Kimble's  tavern  to  see  it."  ^ 

On  the  whole,  both  domestic  and  foreign  transportation  of 
goods  was  to  a  great  extent  in  the  hands  of  traders  and 
producers  rather  than  of  men  who  carried  simply  for  hire. 
Still,  there  continually  were  instances  of  the  latter.  The 
following  description  of  the  seventeenth  century  "Yankee 
coasting  skipper"  illustrates  what  has  just  been  said:  "Gener- 
ally part  owner  of  vessel  and  cargo,  always  a  trader  and 
adventurer,  he  went  from  port  to  port  beyond  control  of 
owners,  who  would  not  have  directed  him  if  they  could.  All 
the  coast  harbors,  Milford,  New  London,  Newport,  Ply- 
mouth, Boston,   Salem,   Portsmouth,  sent  out  and  received 

»"VVeeden,  vol.  II,  p.  603. 


124  OUTLINES  OF  INDUSTRIAL  HISTORY 

these  busy  ketches  and  shallops, — transient  hucksters  of  the 
sea.  Skipper  and  boy  often  made  the  crew ;  if  a  sailor  was 
added,  he  often  carried  a  venture  of  his  own,  trading  his  way 
upward  into  mastership  and  ownership.  The  mackerel  craft 
of  the  summer,  in  winter  coasted  among  the  southern  colonies 
trading  lumher  and  fish  for  grain  and  flour."  ^  Some  of  these 
small  vessels,  in  spite  of  navigation  laws  and  petty  colonial 
restrictions,  not  only  went  to  the  ports  of  the  southern  colo- 
nies, but  penetrated  to  the  West  Indies,  to  Spain,  Portugal, 
Gibraltar,  England,  and  even  to  Guinea,  Madagascar,  and 
Syria. 

The  difference  in  cost  between  land  and  water  transportation 
is  well  illustrated  by  the  charges  on  wheat  shipped  from 
Northampton  to  Boston  in  1669.  For  haulijig  from  North- 
ampton to  the  Connecticut  River,  one  shilling  was  paid; 
thence  down  the  river  and  along  the  coast,  around  Cape  Cod, 
only  eight  pence.  Thus  the  first  two  miles  by  land  cost 
more  than  half  the  total  freight  charge  from  farm  to  market. 
Cattle  and  poultry  were  often  di'iven  to  the  larger  towns,  as  we 
have  seen  was  common  in  England. 

To  such  limited,  slow,  and  uncertain  means  of  transportation 
as  have  been  suggested,  was  the  merchandise  of  the  whole 
colonial  period  subjected. 

The  difficulties  which  passengers  had  to  undergo,  even 
toward  the  close  of  the  period,  are  summed  up  very  well  by 
Benjamin  Franklin,  in  1754,  in  giving  his  reasons  for  fixing 
upon  Philadelphia  as  a  place  of  meeting  for  a  Congress  com- 
posed of  delegates  from  all  the  colonies.  These  difficulties 
were  not  greatly  lessened  during  the  interval  wbich  elapsed 
before  Washington  made  his  journey  on  horseback  from 
Mount  Vernon  to  New  York,  in  1789,  to  be  inaugurated  Presi- 
dent of  the  United  States.  Franklin  writes  thus:  "Phila- 
delphia was  named  as  being  nearer  the  center  of  the  colonies, 
where  the  commissioners  would  be  well  and  cheaply  accom- 
modated.    The  highroads,  through  the  whole  extent,  are  for 

iWeedeu,  vol.  I,  pp.  359.  3G0.  ~ 


THE  DOMESTIC  PERIOD   IN   AMERICA  125 

the  most  part  very  good,  in  which  forty  or  fifty  miles  a  day 
may  very  well  be,  and  frequently  are,  traveled.  Great  part 
of  the  way  may  likewise  be  gone  by  water.  In  summer  time, 
the  passages  are  frequently  performed  in  a  week  from  Charles- 
ton to  Philadelphia  and  New  York ;  and  from  Rhode  Island  to 
New  York,  through  the  Sound,  in  two  or  three  days;  and 
from  New  York  to  Philadelphia,  by  water  and  land,  in  two 
days,  by  stage,  boats,  and  wheel-carriages  that  set  out  every 
other  day.  The  journey  from  Charleston  to  Philadelphia  may 
likewise  be  facilitated  by  boats  running  up  Chesapeake  Bay 
three  hundred  miles.  But  if  the  whole  journey  be  performed 
on  horseback,  the  m.ost  distant  members,  viz.,  the  two  from 
New  Hampshire  and  from  South  Carolina,  may  probably 
render  themselves  at  Philadelphia  in  fifteen  or  twenty  days; 
the  majority  may  be  there  in  much  less  time."  * 

Barter   played  a  very  important   part  in  both 

Transferring.'       -      i-      -^  ■'  ^  ^ 

domestic  and  foreign  trade  throughout  the 
period.  Virginia  had  almost  no  money  but  tobacco  for  nearly 
a  century.  Other  colonies  had  comparatively  little  metallic 
money,  and  what  they  did  have  was  usually  picked  up  from 
all  the  nations  with  which  they  had  any  intercourse.  Massa- 
chusetts had  a  mint  of  her  own  for  thirty  years  in  the  seven- 
teenth century.  Beaver,  wool,  and  wampum  were  for  a  time 
commonly  used  as  currency  in  the  New  Netherlands  and 
Rhode  Island.  The  forms  of  money  current  in  one  colony 
were  discounted  in  another.  Financial  chaos  prevailed 
throughout  the  colonies.  "The  modern  fluidity  of  buying 
and  selling,  the  movement  through  quick  prices  and  in  ready 
money  was  wanting  in  large  as  well  as  small  transactions. 
Mer.chandise  was  present  in  negotiation,  not  only  symbolized 
aa  in  a  money  or  currency,  but  in  actual  bulk  and  weight. 
Men  bartered  peltry,  wampum  or  corn  in  terms  of  money. 
Taxes  were  levied,  not  in  solid  coin  or  its  paper  reprcsent- 

»The  Old  South  Leaflets,  No.  9,  pp.  4,  5— Directors  of  the  Old  South 
Work,  Boston. 
^See  Weeden,  index ;  also  Bruce. 


12G  OUTLINES  OF  INDUSTRIAL  HISTORY 

atives,  but  in  farm  produce,  'country  pay.'  .  .  .  One  of  the 
pinching  wants  of  the  time  was  not  only  for  quicker  capital  and 
more  money,  but  for  a  better  currency  of  that  which  they  had. "  ^ 

Bills  of  exchange  were  very  common,  especially  in  Virginia. 
A  merchant,  in  buying  a  cargo  of  tobacco  from  a  planter, 
gave  him  in  pay  an  order  on  another  merchant  in  England. 
The  planter  then  sent  this  order  to  the  English  merchant 
authorizing  him  to  send  to  Virginia  its  value  in  various  com- 
modities. 

In  spite,  therefore,  of  all  inconveniences  arising  from  the 
scarcity  of  money,  its  great  variety  and  uncertain  values ;  in  spite 
of  petty  regulations  of  all  sorts ;  in  spite  of  adverse  legislation 
respecting  manufacture  and  transportation ;  and  in  spite  of  the 
universal  prevalence  of  the  mercantilist  theory  regarding 
trade;  there  grew  up  in  the  colonies  a  remarkably  shrewd  and 
enterprising  body  of  intercolonial  and  foreign  traders,  who 
were  ready,  whenever  the  political  conditions  should  become 
favorable,  to  push  the  trade  of  the  colonies  and  of  the  United 
States  into  all  ports  that  offered  a  market  for  their  products 
or  that  produced  goods  which  they  desired  to  import. 

The  number  of  ships  from  a  single  colony  engaged  in  the 
cod-fisheries,  and  the  number  of  ships  built  in  all  the  colonies 
in  a  single  year,  will  give  some  suggestion  of  the  activity  of 
this  later  colonial  trade.  From  Massachusetts  alone,  "from 
1765  to  1775  there  were  sent  out  665  vessels  annually,  25,630 
tons,  with  4,405  men.  They  furnished  for  Europe  178,800 
quintals  at  3.5  dollars;  for  the  "West  Indies,  172,500  quintals 
at  2.6  dollars."  ^  In  ship-building,  "The  account  for  all  the 
colonies  for  the  year  1769,  the  only  year  for  which  a  summary 
is  found,  at  least  just  prior  to  the  Revolution,  shows  that  389 
vessels  had  been  built,  having  an  aggregate  of  20,000  tons 
burden.  Of  these  New  Hampshire  built  45 ;  Massachusetts, 
137;  Rhode  Island,  39;  Connecticut,  50;  New  York,  19;  the 
Jerseys,  4;    Pennsylvania,  22;   Maryland,  20;   Virginia,  27; 

'Weeden,  vol.  I,  pp.  314,  315. 
«The  same,  vol.  II,  p.  883, 


THE  DOMESTIC  PERIOD  IN  AMERICA  127 

North  Carolina,  12;  South  Carolina,  12;  Georgia,  2.  The 
whole  number  of  vessels  built  in  all  the  colonies  in  the  year 
17:2  was  182."^ 

The  personal  and  domestic  servants  were  of  two 

Servantg.'  .    ^ 

mam  classes,  slaves  and  indentured  servants. 
The  last  class  consisted  of  persons  who  could  not  pay  their 
fare  to  tbe  colonies,  of  English  criminals,  and  of  colonial 
orphans,  debtors,  and  criminals.  All  these  were  bound  to 
service,  some  voluntarily  in  return  for  transportation  and 
maintenance,  and  others  by  compulsion,  for  a  longer  or 
shorter  term  of  years.  The  usual  term  was  from  three  to  six 
years,  although  occasionally  for  life.  "With  the  exception  of 
those  indented  for  life,  these  servants  were  not  slaves,  and 
usually,  upon  the  expiration  of  their  term,  became  substantial 
citizens  and  property  holders.  The  projjortion  of  criminals 
was  small.  Most  of  those  who  came  voluntarily  were  persons 
who,  owing  to  the  Elizabethan  Statutes  of  Apprentices,  to  the 
assessment  of  low  wages  by  justices  of  the  peace,  and  to  their 
inability  to  seek  work  in  other  parishes  unless  they  could 
guarantee  that  they  would  not  become  public  charges,  were 
unable  to  suj^port  themselves  in  England,  and  had  no  means 
to  pay  their  way  to  America.  "In  1671  there  were  six  thou- 
sand servants  and  two  thousand  slaves"  in  Virginia.  During 
the  eighteenth  century,  the  importance  of  this  class  of  servants 
declined.  In  recent  years  the  Italian  Padrone  System  and  the 
Six  Companies  for  importation  of  Chinese  laborers  are  per- 
versions of  this  old  system  of  labor. 

The  history  of  negro  slavery  in  America  is  too  familiar  to  be 
mentioned  further  here  than  to  state  that,  in  1790,  there  were 
already  007,897  slaves  in  the  United  States.  Of  these  only 
40,-370  were  scattered  over  New  York,  Pennsylvania,  New 
Jersey,  and  the  New  England  States. 

Of  other  forms  of  service  little  can  here  be  said.  Life  was 
simple.    Music,  art,  the  drama,  and  literature  took  the  time  of 

"Wright,  pp.  41,  43. 

^Consult  Bruce,  oh.  ix;  also  Weeden,  index, 


128  OUTLINES  OF  INDUSTRIAL  HISTORY 

a  very  small  proportion  of  the  population,  even  in  the  largest 
towns,  at  the  close  of  the  period.  The  physician  rode  on  horse- 
back, carrying  his  own  medicines  in  his  saddlehags,  to  towns- 
man and  remote  farmer  alike.  In  New  England,  the  minister 
was  the  social  and  intellectual  leader.  In  education,  Harvard, 
Yale,  and  William  and  Mary  College  in  Virginia,  were  pioneers. 
The  public  school  system  of  the  United  States  was  already 
begun  in  Massachusetts  in  1647,  when  each  town  of  fifty 
householders  was  ordered  by  law  to  support  a  school  in  which 
reading  and  writing  should  be  taught,  and  towns  of  one  hun- 
dred householders  must  set  up  a  grammar  school  which  should 
fit  young  men  for  the  university. 

Of  the  political  services  that  were  rendered  during  this 
period  the  mere  mention  of  Samuel  Adams,  Patrick  Henry, 
Washington,  the  Continental  Congi'csses,  Articles  of  Con- 
federation, and  the  Constitution  must  suffice  as  a  reminder. 

Emerson  has  told  us  that  America  and  oppor- 

Dependents.  .  t      i  i  i 

tunity  are  synonymous.  It  has  always  been  so 
regarded.  The  great  abundance  of  cheap  land,  the  slavery  and 
indentured  servant  system,  and  the  sterling  character  of 
the  colonists  prevented  most  persons  from  becoming  eco- 
nomic burdens  upon  the  public,  either  as  paupers  or  as  v/ilful 
parasites.  Of  the  poor  in  New  England,  Mr.  Weedensays: 
"The  few  paupers  existing  under  the  favorable  conditions  of 
life  in  our  towns  were  made  comfortable  and  supported  care- 
fully at  the  public  expense."  ^  The  problem  of  the  poor  had 
not  yet  become  a  national  question,  nor  even  a  state  or 
colonial  question  in  America. 

The  systems  of  landholding  in  different  colonies 

Landlords.  .    n    .        t        .,     ,  ,  p  t^ 

varied  m  detail,  but  everywhere  traces  of  Eng- 
lish ideas,  modified  somewhat  to  suit  the  new  conditions, 
appeared.  Examples  of  this  importation  of  English  methods 
of  landholding  are  found  in  the  feudal  theory  that  all  land 
titles  had  their  source  in  the  Crown;  in  the  common  New 
England  practice  of  having  homesteads  in  severalty  and  at  the 

>Vol.  II,  p.  696. 


THE  DOMESTIC  PERIOD  IN  AMERICA  129 

same  time  commonage,  or  associated  possession  of  tillage, 
pasture,  and  woodlands;  and  in  the  manors,  of  'New  York, 
Xew  Jersey,  Delaware,  and  other  colonies.  In  spite,  how- 
ever, of  this  persistence  of  Old  World  ideas,  the  _persoiiaiii:ea-_ 
dom  of  the  colonists  and  the  fact  of  the  superabundance  of 
unoccupied  land  made  it  remarkably  easy,  in  comparison  with 
England,  for  mpst^ien  in  the  colonies  to  be  their  own_land-]\ 


lords.     The  fact  of  the  existence  from  the  first  of  an  unusuall] 
large  percentage  of  free  landowners  in  this  country  can  not  be 
held  in  mind  too  constantly. 
/^  Capital,  both  in  the  form  of  tools  and  machinery 

f^  CapitaUsts.  ~4— .  ,  .  ,  , 

and  of  loan  funds,  was  limited  throughout  the 
period.  Still,  there  was  capitalistic  production  of  all  sorts, 
agriculture,  miniiig,  fishing,  manufacture,  transportation,  and 
trade.  The  amount  of  capital  necessary  for  any  venture  was 
comparatively  small,  and  the  hope  of  one  day  taking  part  in 
production  as  a  capitalist  as  well  as  a  laborer  was  in  the  heart 
of  every  young  man.  Much  of  the  colonization  itself  was  in 
the  nature  of  English  investment  of  capital  as  well  as  of  labor, 
and,  throughout  the  period,  Englishmen  had  more  or  less 
iiiterest  in  many  a  colonial  ship  and  trading  venture. 

As  for  loan  funds,  the  accounts  of  .the  efforts  of  the  various 
colonies  to  do  a  banking  business  founded  upon  land  values, 
commodities,  and  with  fiat  money,  would  be  instructive  read- 
ing to  m.any  American  voters  of  to-day.^ 

The  Yankee  trader,  in  debt  to  an  Englishman 

Undertakers.  . 

for  the  capital  with  which  he  bought  his  ship 
and  rigging,  to  New  England  producers  for  his  cargo,  and 
plying  between  Boston  and  England  with  the  expectation  of 
gradually  paying  his  debts  in  both  places  out  of  the  profits  of 
his  business  is  a._good--type  of  the  enterprise  of  the  small 
manager  of  tlie  time,  whether  operating  with  liis  own  capital 
or  that  of  others.  lie  shrewdly  smuggled  desirable  goods  in 
violation  of  English  and  colonial  laws,  braved  the  perils  of  the 
sea  in  vessels  smaller  than  our  pleasure  yachts,  ran  great  risks 

'Weeden,  chs.  viii  ami  xiii. 


130  OUTLINES  OF  INDUSTRIAL  HISTORY 

of  capture  by  pirates,  and  mastered  the  difficulties  of  trade  by 
barter  and  by  variable  and  insufficient  currency.  The 
I  qualities  thus  developed  were  the  resourceful  and  frequently 
unscrupulous  qualities  of  the  typical  industrial  manager, 
AYhen  the  larger  opportunities  which  came  with  greater  cap- 
ital and  steam  manufacture  and  transportation  were  offered  to 
such  men,  their  development  into  the  great  captains  of  industry 
of  to-day  was  certain. 

"With  the  exceptions  noted  in  the  section  on 
"Servants,"  common  laborers  were  free  men. 
And  it  must  be  remembered  that  the  large  class  of  indentured 
servants  were  as  a  rule  only  temporary  exceptions,  if  excep- 
tions at  all.  Indeed,  those  who  entered  this  condition 
voluntarily  may  perhaps  best  be  regarded  as  wage-earners  whc 
were  working  a  long  time  for  a  comparatively  small  wage  paid 
them  in  transportation  and  maintenance. 

Especially  in  the  north,  continual  efforts  were  at  first  made 
by  colonial  legislatures  and  town  authorities  to  fix  wages*  and 
then,  when  this  failed,  to  regulate  them  by  administration. 
Wages  also  were  often  paid  in  commodities.     This  continual 
interference  with  wages,  coupled  with  the  fact  that  a  man 
could  often  get  more  commodities  in  a  year  by  devoting  him- 
self to   agriculture   than   by  plying   his   trade,    discouraged 
manufacture  and  kept  the  number  of  skilled  artisans  small. 
The  fisheries  present  many  interesting  examples  of  coopera- 
tion, as  those  who  fitted  out  and  manned  a  ship  usually  agreed 
upon  certain  shares  of  the  catch  as  their  reward.     In  the 
skilled  occupations,  apprenticeship  prevailed.     On  the  whole, 
wage-earners  shared  in  the  rude  comfort  of  the  period  in  spite 
of  all  attempts  to  restrict  and  regulate  wages. 
Society:  The  Of   courso  slavcs  owncd  uo  property  and  were 
Pr^ateVrop-  themselvcs  merely  chattels  of  others.     Free  men 
Freedom      owucd  all  kiuds  of  property  that  were  then  in 
of  Contract,    g^istence,  subject   only  to   the  manifold  inter- 
ferences of  society  through  the  agency  of  colonial  and  English 
'See  Weeden,  index;  also  Bruce. 


THE  DOMESTIC  PERIOD  IN  AMERICA  131 

customs,  legislation,  and  administration.  In  the  case  of  land, 
we  have  already  seen  that  full  ownership  was  practically  enjoyed. 
In  Virginia,  tracts  of  twenty  thousand  and  thhty  thousand  acres 
were  sometimes  in  the  possession  of  one  man.  We  have  also 
seen  that  in  New  England,  in  addition  to  private  ownership 
of  land,  there  was  also  in  most  towns  social  ownership  of 
tillage,  pasture,  and  woodland.  Both  private  and  social  land 
was  often  used  and  cultivated  in  accordance  with  many  regu- 
lations supposedly  demanded  by  the  social  welfare.  The  size 
of  breeding  horses,  the  varieties  of  farm  products,  and  the 
number  of  animals  each  man  could  pasture  upon  the  common 
lands,  were  considered  proper  subjects  for  the  consideration 
and  action  of  town  authorities. 

In  regard  to  property  other  than  land,  the  regulations  of 
society  by  means  of  English  laws  have  already  been  men- 
tioned. In  addition,  there  was  nothing  a  man  possessed  that 
was  not  at  some  time  in  some  colony  interfered  with  by  society 
through  the  public  authorities.  The  size  and  style  of  houses, 
materials  and  style  of  clothing,  varieties  of  food,  markets, 
prices,  and  wages,  were  all  public  matters.  Even  a  man's 
amusements,  private  conduct,  and  religious  beliefs,  were  not 
free  from  municipal  interference.  In  short,  private  property 
in  everything  was  allowed,  and  contract  was  supposed  to 
regulate  the  relations  of  man  to  man,  but  both  private  prop- 
erty and  contract  were  to  be  exercised  only  Avithin  the  limits 
supposed  to  be  set  by  the  social  Avelfare.^  Perhaps  the  spirit  of 
these  regulations  and  tlie  extent  to  which  they  went  may  be 
fairly  well  suggested  by  the  following  extracts  from  tlie  Non- 
Importation  Agreement  of  1774,  signed  by  fifty  delegates 
from  all  the  colonies  but  Georgia,  and  after Avard  ratified  by 
the  Colonial  Legislatures:  "We  Avill  use  our  utmost  endeav- 
ors to  improve  the  breed  of  sheep,  and  to  increase  their  num- 
ber to  the  greatest  extent ;  and  to  that  end  Ave  Avill  kill  them 
as  sparingly  as  may  be,  especially  those  of  the  most  profitable 
kind;   nor  will  we  export  any  to  the  West  Indies  or  else- 

*Weeden,  index  under  "Laws." 


132  OUTLINES  OF  INDUSTRIAL  HISTORY 

where ;  and  those  of  us  who  are  or  may  become  overstocked 
with,  or  can  conveniently  spare,  any  sheep,  will  dispose  of 
them  to  our  neighbors,  especially  to  the  poorer  sort,  upon 
moderate  terms. 

"Eighth.  That  we  will,  in  our  several  stations,  encourage 
frugality,  economy,  and  industry;  and  promote  agriculture, 
arts,  and  the  manufactures  of  this  country,  especially  that 
of  wool;  and  will  discountenance  and  discourage  every 
species  of  extravagance  and  dissipation,  especially  all  horse- 
racing,  and  all  kinds  of  gaming,  cock-fighting,  exhibitions 
of  plays,  shows,  and  other  expensive  diversions  and  enter- 
tainments ;  and  on  the  death  of  any  relation  or  friend,  none 
of  us,  or  any  of  our  families,  will  go  into  any  further 
mourning  dress  than  a  black  crape  or  ribbon  on  the  arm  or 
hat  for  gentlemen,  and  a  black  ribbon  and  neck  lace  for 
ladies,  and  we  will  discountenance  the  giving  of  gloves  and 
scarfs  at  funerals. 

"Ninth.  That  such  as  are  venders  of  goods  or  merchandise 
will  not  take  advantage  of  the  scarcity  of  goods  that  may  be 
occasioned  by  this  association,  but  will  sell  the  same  at  the 
rates  we  have  been  respectively  accustomed  to  do,  for  twelve 
months  last  past.  And  if  any  vender  of  goods  or  merchandises 
shall  sell  any  such  goods  on  higher  terms,  or  shall  in  any 
manner,  or  by  any  device  whatsoever,  violate  or  depart  from 
this  x\greement,  no  person  ought,  nor  will  any  of  us,  deal  with 
any  such  person,  or  his  or  her  factor  or  agent,  at  any  time 
thereafter  for  any  commodity  whatever."  The  Agreement 
then  went  onto  provide  for  the  choice  of  a  "Committee  in 
every  County,  City,  and  Town,"  whose  duty  it  was  to  enforce 
the  regulations  so  far  as  possible.  The  names  of  all  those  who 
broke  it  were  to  be  published  and  "universally  contemned  as 
the  enemies  of  American  liberty."  ^ 

su    estive     ^-  Ii^  what  respccts  was  the  industry  of  America, 

Questions,  during  the  Domestic  Period,  like  the  industry 
of  England?     Give  reasons. 

iHinsdale,  p.  447. 


THE  DOMESTIC  PERIOD   IN  AMERICA  133 

2.  lu  what  respects  was  it  ditTereut?     Why? 

3.  Show  how  English  Liws  respecting  American  manufac- 
ture and  trade  helped  to  bring  on  the  war  for  independence. 

4.  Show  how  the  framing  and  adoption  of  our  Constitution 
were  due  ptu'tly  to  the  fact  that  the  colonists  found  great 
difficulty  in  cai'rying  on  their  trade  under  the  Articles  of 
Confederation. 

5.  Give  any  account  you  may  have  seen  of  the  English 
manor  as  reproduced  in  America. 

G.  Describe  any  colonial  attempts  to  own  land  in  common 
about  which  you  have  read. 

7.  Why  were  they  given  up? 

8.  Eeread  the  questions  at  the  beginning  of  Chapter  I, 
Part  II. 

9.  Search  all  your  school  histories  of  the  United  States  for 
answers  to  some  of  the  above  questions ;  also  for  what  they 
say  about  home  life,  products,  tools,  methods,  routes  of 
travel,  amusements,  etc.,  and  of  men  and  women  of  colonial 
times  in  America. 

10.  Show  that  the  luxuries  of  one  period  are  often  the 
necessities  of  another. 


134  OUTLINES  OF  INDUSTRIAL  HISTORY 


Chaptek  IV 

THE    PERIOD   OF  THE   FACTORY    SYSTEM    OF   INDUSTRY   IN" 
ENGLAND    AND    THE    UNITED    STATES 

''   Introductory  ^-  ^^^^  accounts  of  the  Hves  of  great  inventors 
Questions,     j^j^yg  jq^  peacl?     Sliow  whether  their  inventions 
were  wholly  new  or  merely  improvements  in  some  machine  or 
process  that  had  not  yet  been  successful/ 

2.  Describe  any  case  that  you  know  where  machines  have, 
on  a  large  scale,  taken  the  place  of  men  and  women.  What 
work,  if  any,  are  those  men  and  women  now  doing? '^ 

3.  Has  the  product  become  any  cheaper  to  the  consumers? 
Why? 

4.  Give  cases  of  persons  who  are  mere  machine  tenders. 
What  is  the  effect  of  their  occupation  upon  them?     Why? 

5.  AVhat  advantages  are  there  to  put  with  the  disadvan- 
tages of  minute  division  of  labor?     ^T'^ttM/-..-  v   /^  < 

6.  Name  some  occupations  in  which  machinery  plays  a  very 
small  part.     Give  reasons  for  the  fact. 

7.  Are  many  persons  employed  in  such  occupations?     Why? 

8.  Is  the  number  in  such  occupations  increasing  or  decreas- 
ing in  comparison  with  total  population? '      "i-e-^    ciT-^y:^^  lMjY^ 

9.  Give  examples  of  liberties,  conditions,  limitations,  and 
prohibitions,  respecting  private  business  enterprises  which  have 
been  made  by  society  as  represented  in  its  lawmaking  bodies.* 

'Consult  encyclopedias;  also  Pai'ton,  Captains  of  Industry  — 
1889-1891,  Houghton,  Mifflin  &  Co.,  Boston;  Smiles,  Industrial  Biog- 
raphy;' Iromoorkers  and  Toohnakers — 1873,  Harper  Brothers,  New- 
York;  and  Smiles,  Men  of  Invention  and  Industry — 1885,  Harper 
Brothers,  New  York. 

^Davis,  Does  Machinery  Displace  Labor? — "The  Forum,"  July, 
1898;  Potter,  Man  and  the  Machine — "North  American  Review," 
vol.  65,  p.  385;  "Wright,  Do  Labor-Saving  Machines  Deprive  Men 
of  Labor? — "The  Chautauquan, "  vol.  25. 

^Harris,  Is  There  Work  Enough  for  All? 

^Stimson,  Handbook  to  the  Labor  Laio  of  the  United  States — 1896, 
Charles  Scribner's  Sons,  New  York. 


THE  FACTORY  PERIOD  OF  INDUSTRY  135      /  - 

10.  Give  examples  of  private  business  enterprises  that  are  ^'T^'^ 
carried  on  in  spite  of  the  wishes  of  society  as  expressed  in  ^^°"7^*^ 
public  opinion  and  in  laws.     Give  reasons. 
// 11.  Describe  the  largest  business  enterprise  of  which  you 
have  du'ect  personal  knowledge. 

a.  How  much  land  does  it  use? 
h.  How  much  capital  does  it  use? 

c.  How  many  men  and  women  are  employed  in  it? 

d.  What  kind  of  a  man  is  at  the  head  of  it? 

e.  Why  has  the  business  become  so  large? 
/.  What  laws  are  in  its  favor? 

g.  Why  were  they  made? 
h.  Who  made  them? 

12.  Name  some  national  public  questions  of  recent  years 
which  directly  affect  private  business  enterprises. 

13.  Name  some  state  public  questions  of  a  similar  sort.  , 

14.  Xame  some  local — town,  city,  or  county — public  ques- 
tions of  a  like  kind. 

15.  How  are  such  questions  settled  in  the  United  States? 
10.  Are  they  always  settled  right?     Why? 

17.  How  does  the  ratio  of  wage-workers  to  the  total  popula- 
tion now  compare  with  the  ratio  of  wage-workers  to  the  total 
population  one  hundred  years  ago?    Why? 

18.  Are  the  present  methods  of  producing,  sharing,  and 
consuming  utilities  likely  to  change?     Why? 

19.  Can  you  see  signs  of  change  now?     If  so,  what  signs?  \ 

20.  Are  such  changes  usually  rapid?     Why? 

I.  SUBSTITUTION  OF  MACHINES  FOR  TOOLS  AND  THE  UTILIZATION  OF 
STEAM  AS  A  MOTIVE  JfO  WEB  « 

Karl     Marx^     has     analyzed     the     differences 

Distinction  lie-  ,  ,  ,  "^  ,  .  ^    ,  , 

tween  a  Tool   botwecn  a  tool  and  a  machine,  and  has  shown 

and  a  Much  inc.  „  ,      .        .„  ,  .  <•    ii 

the  profound  significance  to  workingmen  oi  the 
modern  substitution  of  one  for  the  other.     A  needle  directed 

'Marx,  Cajyital,   eh.    xv  — 188G,   The   Humboldt   Piil)lishing  Co., 
New  York. 
^Tlie  (le\  flopincMt  of  iiioilern  machinery  and  mean.s  of  tnuispor- 


136  OUTLINES  OF  INDUSTRIAL  HISTORY 

by  the  baud  of  a  sewiug  woman  is  a  mere  tool.  Wbeii  it 
moves  up  and  down  in  the  grasp  of  a  mechanism  wbicb  is 
itself  subject  to  some  motive  power,  human  or  otherwise,  the 
needle  has  become  part  of  a  machine.  In  the  second  case,  the 
needle  is  not  directly  subject  to  the  operator  but  to  the 
mechanism  which  determines  the  direction  and  the  limits  of 
its  motion.  It  is  still  indirectly  subject  to  the  operator,  who 
can  say  whether  it  shall  move  rapidly  or  slowly  or  not  at  all. 
The  fundamental  difference  between  a  mere  tool  and  a 
machine  is  that  in  the  machine  the  tool  has  passed  out  of  the 
direct  control  of  the  handicraftsman.  How  far  removed  the 
tools  of  the  machine  are  from  direct  human  control  depends 
upon  the  complexity  of  the  machine.  In  a  great  variety  of 
modern  machine  industries,  many  of  the  workers  have  become 
machine  tenders,  almost  as  automatic  as  the  mechanically 
directed  tools  themselves. 

Besides '^tools,  a  machine  also  has  a_transmitting  mechanism 
and"^  motor  mgcbanism.  On  the  basis  of  this  analysi? 
machines  have  long  been  used  by  civilized  men.  The  simplest 
windmill  for  gi-inding  grain  has  arms  for  catching  the  force 
of  the  wind,  a  shaft  for  transmitting  this  force,  and  a  rotating 
stone  to  crush  the  grain. 

The  Develop-  Modcm  machiucs  surpass  early  machines  in  thr 

"^Michrneryr**  uumbcr.  Variety,  speed,  and  precision  of  theii 

Tools.        tools.      The  spinning  jenny  and    mule   which 

wrought  a  revolution  in  cotton  manufacture  held  a  Jarge  num- 


tation  is  of  so  much  significance  in  the  development  of  the  indus- 
tries of  the  Factory  Period  that  both  the  transforming  and  the 
transporting  groups  of  occupations  are  here  discussed  before  the 
extractive  group.  It  will  be  observed,  however,  that  in  this 
long  chapter,  with  its  numerous  sub-headings,  the  same  method 
of  grouping  under  the  words  "Extractors,"  "Transformers," 
"Transporters,"  etc.,  made  familiar  to  us  in  Part  I,  and  used  thus 
far  in  Part  II,  is  practically  continued.  The  apparent  complexity 
of  topics  will  be  somewhat  simplified  if  this  grouping  is  kep*. 
clearly  in  mind. 


THE  FACTORY   PERIOD   OF  INDUSTRY  137 

ier  of  spindles  instead  of  the  one  of  u  hand  spinning  wheel. 
Hammers  vary  in  weight  from  the  hammers  of  pile  drivers 
and  trip  hammers  to  those  nsed  by  a  dentist  in  filling  teeth, 
A  mowing  machine  and  harvester  have  a  score  or  so  of  station- 
ary shear  blades  over  which  the  same  number  of  active  blades 
move  back  and  forth  with  great  rapidity.  The  human  hand 
can  stamp  the  few  letters  of  a  man's  name  or  the  name  of  a 
post  office  upon  envelopes  at  the  rate  of  several  hundi-ed  in  an 
hour,  by  using  a  rubber  stamp.  The  modern  printing  press 
can  stamp  the  thousands  of  letters  of  an  eight-page  newspaper 
up^n  72,000  sheets  in  an  hour.^ 
"^  The.  reader   needs  only  to  appeal  to  his  own 

^  The  Develop-  .■      \  i    ^  •  i 

ment  of  Modern  experience  and  reading  to  accumulate  evidence 

Machinery:  The  ,         t         ,  »      ,  .      . 

Transmittine:  of  the  development  of  the  transmitting  mechan- 

Mecbanism.      .  .  ,  ,  .  m-  i  n 

ism  of  modern  machinery.  Many  have  seen  the 
shafts,  wheels,  bands,  and  confusing  variety  of  motion  of  some 
factory.  All  know  of  the  building  up  of  manufacturing 
towns  like  Lowell  and  Manchester  by  the  transmission  of  the 
w'ater  power  of  a  single  river.  Most  have  ridden  upon  cable 
or  electric  cars  driven  by  the  power  transmitted  for  miles  by 
cable  or  l)y  electric  wire.  The  press  has  exploited  the  fact 
of  the  utilization  of  the  water  power  of  Niagara  to  furnish 
heat,  light,  and  motion,  for  the  city  of  Buffalo.  The  storage 
battery  is  also  an  example  of  the  transmission  of  power. 
3  The  Develop-  Howcver  completely  the  future  development  of 
Machi'n'erj^'The  cloctricity  as  a  motivo  power  may  enable  man  to 
Motive  Power,  (jiggard  the  relatively  wasteful  steam  engine,  the 
record  of  steam  has  already  been  a  sufficiently  brilliant  one. 
Animal  power  was  weak,  the  wind  was  inconstant,  and  water 
power  existed  only  in  the  vicinity  of  rapid  streams.  AYhen  steam 
was  harnessed,  all  three  of  these  limitations  to  the  development 
of  motive  power  were  ended.  The  power  of  steam  was  prac- 
tically unlimited,  it  could  bo  maintained  continuously  at  will, 
and  it  could  be  generated  at  any  place  upon  land  or  sea.     IMan 

^Wright,  Industrial  Evolullun  of  the  United  States,  p.  333. 


138  OUTLINES  OF  INDUSTRIAL  HISTORY 

had  found  a  motive  power  which  could  drive  his  most  complex 
transmitting  mechanism  weighted  with  an  infinite  variety  and 
number  of  tools.  The  titanic  power  of  steam  was  at  the 
service  of  any  man,  at  any  time,  at  any  place,  for  any 
purpose. 

//.  DEVELOPMENT  OF  MANUFACTURES  ACCOMPANYING  THE  GREAT 
INVENTIONS 

"The  Great  In-  It  i^  uot  the  purposc  of  theso  pages  to  give  in 
''^'workor^  any  detail  the  story  of  "the  great  inventions;" 
Many  Men.  -^  jg  ^^  ^  general  way  known  to  most  people. 
The  fact  that  seems  especially  worthy  of  emphasis,  before  we 
pass  to  a  consideration  of  the  effect  of  these  inventions  upon 
all  kinds  of  productive  processes,  is  that  even  these  inventions 
were  the  work  of  many  men.  Neither  the  engine  nor  any 
spinning  or  weaving  machine  was  perfected  and  adopted  all 
at  once.  The  first  use  of  a  steam  engine  in  cotton  mills  was 
in  1785,  but  it  was  not  until  forty-five  years  afterward,  in 
1830,  when  the  Liverpool  and  Manchester  Railway  was 
opened,  that  steam  locomotion  upon  land  became  important. 
"No  one  of  the  inventions  which  were  the  greatest  in  their 
effect,  the  jenny,  the  water-frame,  the  mule,  the  power  loom, 
was  in  the  main  attributable  to  the  effort  or  ability  of  a  single 
man ;  each  represented  in  its  successful  shape  the  addition  of 
many  successive  increments  of  discovery;  in  most  cases  the 
successful  invention  was  the  slightly  superior  survivor  of  many 
similar  attempts.  'The  present  spinning  machinery  which 
we  now  use  is  supposed  to  be  a  compound  of  about  eight  huii- 
dred  inventions.  The  present  carding  machinery  is  a  com- 
pound of  about  sixty  patents.'  "  ^ 

One  invention  could  not  well  be  utilized  until  another  was 
perfected.  At  one  time  weaving  was  ahead  of  spinning,  and 
there  was  a  gi'eat  demand  for  yarn.  Then  spinning  was  so 
improved  that  the  opposite  was  true.  Then  dyeing,  bleach- 
ing, and  finishing  lagged  behind.     The  attention  of  all  those 


'Hobson,  pp.  57-60. 


THE   FACTORY  PERIOD  OF  INDUSTRY 


139 


interested  in  the  completed  cloth  was  concentrated  upon  one 
partial  process  after  another  until  invention  had  covered  the 
whole  gi'oup  of  processes  and  all  were  harmonized  and  made  to 
supplement  each  other. 

The  following  table  of  statistics^  will  show  the 

Increase  In  ... 

Manufacture   slow  proffrcss  of  invcntiou  HI  cottou  machinery, 

of  Textiles.  -,  ,  ■  . 

and  also  the  enormous  increase  m  cotton  pro- 
duction after  the  inventions  became  harmonized.  This 
increase  is  well  indicated  by  the  imports  of  cotton,  for  Eng- 
land produced  no  cotton  at  home : 


Dates. 


1730 
1741 

1764 


1771 

to 

1775 


1781 
1785 

1792^ 
18i:j 


'^^^^8:^0 

1832 
1841 


Cotton  Im- 
ported, lbs. 


1,545,472 
1,645,031 

8,870,393 


4,764,589 


5,198,775 
18,400,384 

.Lu^  I    ^ 

34,907,497 

51,000,000 

261,200,000 


287,000,000 
489,900,000 


Dates. 


)7      17 


1748 


1764 
1764 

1768 

1771 
1775 
1779 


179^ 

1813 
1830 


Inventions,  etc. 


h. 


I- 


J . —  tAJ~€JP^'^ 


Wood, 


1832 
1841 


Wyatt's  roller-spinning. (p 

Kay's  fly-shuttle.  "^^^T^^^  ^'^:^:^^^_frr  "^ , 
Paul's  carding -machine  (usfelessmitirim- 
proved    by    Lees,    Arkwright, 

1772-74).  ',^.-^..,,,     '     ...w?:;,_i>, 

Hargreave's    spinning  -  3e|iny    (patented-^^-^itA.^ ' 
1770).     For  weft  only.  <^  ^*^^^^^  ^^<?  A'£^>i,^_ 
Calico-printing  introduced   into   Lanca- 

Arkwright  perfects  Wyatt's  spinning-  V*''*^^'^ 
frame  (patented  1769),  liberating  cotton  ^^dt^ 
from  dependence  upon  linen  warp.  -^(Kr*-^*-^-^ 

Arkwright's  mill  built  at  Ciomford.  | 

Arkwright  takes  patents  for  carding, 
drawing,  roving,  spinning. 

Crompton's  mule  completed  (combining 
jenny  and  water- frame,  jiroducipg  Imer      - 
and  more  even  yarn) .        f^Jty^-lL^  ^  ^ 

^Cartwright's  power -loom.]  Watt  and 
Boulton's  first  engine  for  cotton-mills. 

Whitney's  saw-gin. 

Horrock's  dressing-machine. 

The  "Thrcstle"  (almost  exclusively  used 
in  England  for  spinning  warj)). 

Roberts'  self-acting  mule  perfected. 

Bullough's  improved  power-loom.  Ring 
spinning  (largely  used  in  U.  S.  A., 
recently  introduced  into  Lancashire). 


%i)i-<i   I  -(j'^-^-i^  <i*-trt^'*-^ 


Tlohson,  pp.  57-60 


tTT5 


C,*-^^'t**«-^t*'— tIb-**^*^ 


1. ' . 


4-  L^' 


U, 


yl^C^^it-^—^^ 


140  OUTLINES  OF  INDUSTRIAL  HISTORY 

The  number  of  pounds  of  cotton  worked  up  in  1887-1888  was 
1,530,000,000,  nearly  four  times  as  much  as  in  1841.^ 
[KoTE. — A  curve  for  these  figui'es  may  easily  be  plotted  upon 
ruled   note-jiaper,    and  Avill    aid    the    mind   to    realize   the 
enormous  eximnsion  in  cotton  manufacture,] 

"From  this  schedule  it  is  evident  that  the  history  of  this 
trade    may   be    divided   with    tolerable    accuracy  into    four 
.^^^periods : 
'^j^^^^^t^Ji^    "1.  The  preparatory  period  of  experimental  inventions  of 
Wyatt,  Paul,  etc.,  to  the  year  1770. 

"2.  1770  to  1792  (circa),  the  age  of  the  great  mechanical 
inventions. 

,    "3.  1792  to  1830,  the  application  of  steam  power  to  manu- 
facture and  improvements  of  the  gi'cat  inventions. 

"4.  1830  onward,  the  effect  of  steam  locomotion  upon  the 
industry  (1830,  the  opening  of  the  Liverpool  and  Manchester 
railway) . "  ^ 

The  growth  of  this  industry  gives  some  indication  of  the 
importance  to  textile  industries  in  general  of  the  new  motor 
jjower  when  coupled  Avith  complex  and  efficient  machinery. 
A  study  of  the  table  just  given  shows  how  slightly  the  amount 
of  cotton  manufacture  was  increased,  even  by  the  great  inven- 
tions, until  the  new  motive  j)ower  of  steam  was  applied  in  the 
last  years  of  the  eighteenth  century.  The  introduction  of 
steam  engines  was  not  general  until  after  1813,  but  after  that 
the  cotton  importation  shot  up  over  five  hundred  per  cent, 
in  about  fifteen  years.  The  effect  of  the  application  of  steam 
power  to  transportation  after  1830  helped  to  produce  another 
phenomenal  increase.  The  statistics  of  increase  in  importa- 
tations  of  wool  show  nearly  the  same  irregularities  of  expan- 
sion, although  woolen  imijortatious  are  not  a  correct  index 
to  the  expansion  of  woolen  manufacture,  owing  to  the  fact 
that  England  also  produced  wool. 


1,'p.  86. 


2The  same,  p.  60. 


THE  FACTORY  PERIOD   OF  INDUSTRY  141 

The  relation  of  the  new  motivo  power  to  tlio 

Iiirrease  in  the  .  ,     ,  .,  .  l        l  ±        i 

Manufacture  iron  industry  presents  a  striking  contrast  to  tliat 
which  it  sustains  to  the  textile  mannfactures. 
Hobson  points  out  that,  while  in  the  textile  industries,  espe- 
cially cotton,  invention  of  machinery  preceded  the  utilization 
of  steam  as  a  motive  power  and  was  merely  quickened  and 
made  effective  by  it,  in  the  iron  industry  comparatively  little 
improvement  in  processes  and  machinery  took  place  until  it 
was  demanded  by  the  existence  of  the  new  motive  power.  In 
1788,  the  total  production  of  iron  in  England  is  reported  to 
have  been  only  Gl,300  tons;  in  1806,  258,206  tons;  in  1839, 
1,377,790  tons;  in  1895,  7,703,459  tons.^ 

"Iron  has  become  a  foundation  upon  which  every  machine 
industry  alike  is  built.  The  metal  manufactures,  so  small  in 
the  eighteenth  century,  attained  an  unprecedented  growth  and 
a  paramount  importance  in  the  nineteenth.  The  application 
of  machinery  to  the  metal  industries  has  led  to  an  output  of 
inventive  genius  not  less  remarkable  in  this  century  than  the 
textile  inventions  of  the  eighteenth  century."" 

The  names  and  deeds  of  Brindley,  Smeaton,  Maudsley, 
Nasmyth,  Bessemer,  Siemens,  Martin,  and  others,  must  suffice 
to  suggest  the  details  of  these  inventions. 

Not  all  transforming  industries  have  suffered  the 

The  Kinds  of  |;qq|  ^f  i]^q  jj^ud  workcr  to  be  taken  from  his 

Manufacture 

Which  Have   fingei's  and  put  into  the  grasp  of  an  automatic 

Most  Generally         o  i  o        i 

Been  Given  Up  machinc.     The  extent  to  which  this  can  be  done 

to  Maclimery.^ 

depends  very  much  upon  the  demands  of  men 
and  women  as  consumers. 

Some  important  facts  as  to  the  industries  which  have 
already  been  taken  possession  of  by  machinery  can  be  gath- 
ered by  a  class  of  students  or  by  an  individual.  As  a  rule 
those  industries  will  bo  found  to  be  carried  on  by  machinery 
which  are  characterized  as  follows : 

'Ilobson,  pp.  64,  65.     Compare  TJie  Statesman's  Year-Boole,  1897. 

'The  same,  p.  66. 

^The  same,  pp.  68-71;  also  cli.  xiv. 


142  OUTLINES  OF  INDUSTRIAL  HISTORY 

1.  By  a  large  product. 

2.  By  a  product  of  uniform  quality  and  pattern. 

3.  By  a  product  whose  valuable  properties  are  relatively 
permanent. 

The  most  universal  wants  of  mankind,  for  food,  clothing, 
and  shelter,  furnish  a  primary  demand  for  such  articles.  All 
the  milling  processes  for  grains;  canning  and  packing  proc- 
esses for  fruits,  vegetables,  and  meats ;  the  manifold  processes 
of  preparing  the  materials  for  clothing,  including  clothing  for 
the  head  and  feet;  and  the  preparation  of  all  common 
varieties  of  building  materials  and  house  furnishings,  have 
been  given  over  to  machines. 

On  the  other  hand,  goods  that  are  demanded  in  small 
quantities,  and  goods  that  must  suit  the  individual  taste  of 
esthetic  consumers,  are  still  largely  confined  to  the  personal 
skill  of  hand  workers. 

The  machinery  that  makes  commodities;  together  with 
the  machinery  of  transportation,  and  the  tools  of  hand 
workers  and  servants,  both  men  of  science  and  domestic  serv- 
ants; in  short,  tools  and  machinery  of  all  kinds,  form  a 
secondary  class  of  commodities  which  can  easily  be  made  by 
machinery.  Such  commodities,  as  a  rule,  are  wanted  in  large 
quantities,  of  uniform  quality  and  pattern ;  and  their  valuable 
properties  are  enduring.  Machinery  for  making  machines  has 
therefore  marvelously  increased  during  the  last  half  of  this 
century. 

"A  general  survey  of  the  growth  of  new  industrial 
methods  in  the  textile  and  iron  industries  marks  out 
three  periods  of  abnormal  activity  in  the  evolution  of 
modern  industry.  The  first  is  1780  to  1795,  when  the 
fruits  of  early  inventions  are  ripened  by  the  effective  appli- 
cation of  steam  to  the  machine  industries.  The  second 
is  1830  to  1845,  when  industry,  reviving  after  the  Euro- 
pean strife,  utilized  more  widely  the  new  inventions,  and 
expanded  under  the  new  stimulus  of  steam  locomotion. 
The    third    is    1856   to    18G6    (circa),    when  the  construe- 


THE  FACTORY  PERIOD  OF  INDUSTRY  143 

tion  of   machinery   by   machinery   became    the   settled  rule 
of  industry."  ^ 
The  Effect  of   ^6  havo   already  called  attention  to  the  fact 
chinlfproduc-  that   the    Domcstic    System  of    industry    had 

Localizing  resultcd  in  a  certain  amount  of  concentration 
Manufactures.  ^^  special  Varieties  of  woolen  manufacture  in 
certain  districts  of  England  (see  p.  91).  The  same  tendency 
was  manifest  in  the  cotton,  silk,  and  cutlery  manufactures. 
Sometimes  factories  of  fifty  looms,  and  single  employers  having 
from  one  hundred  to  one  hundred  and  fifty  men,  Avere  found 
before  the  time  of  the  great  inventions.^ 

This  tendency  was  immediately  strengthened  and  at  length 
made  economically  certain  by  the  introduction  of  steam- 
driven  machinery.  The  new  machinery  was  expensive,  and 
therefore  could  not  be  made  to  pay  unless  a  large  product  was 
turned  out  by  its  aid.  The  distances  over  v/hich  the  motive 
power  of  steam  could  be  economically  transmitted  were  not 
great,  and,  therefore,  large  factories  crowded  with  machinery 
and  workers  became  the  rule.  All  the  preliminary  and  sup- 
plementary processes  connected  with  the  manufacture  of  a 
great  staple  commodity  like  cotton,  or  wool,  or  iron,  grew  up 
in  the  immediate  vicinity  of  the  main  process.  A  fuel  supply 
was  also  another  determining  factor  in  placing  the  new  manu- 
factures. In  response  to  the  economic  compulsion  of  these 
new  conditions,  the  manufacturing  industries  of  England 
were  rapidly  withdi'awn  from  the  rural  communities  and  from 
the  households  and  concentrated  in  the  coal  region  of  the 
north  and  west  of  England  and  in  southern  Wales. 

"It  is  also  curious  to  notice  that  each  coal-field  has  its  own 
particular  manufacture  closely  associated  with  it.  Thus  the 
Y'orkshiro  coal-field  contains  most  of  the  towns  where  the 
woolen  industry  prevails,  while  its  southern  extension,  which 
descends  into  Nottinghamshire,  includes  the  cutlery  and 
hardware  district  of   Shettield  and  the  lace  and  hosiery  of 

'Hobson,  p.  07. 
2aibbin.s,  pp.  325,  320. 


-^^■' 


144  OUTLINES  OF  INDUSTRIAL  HISTORY 

Xottingham.  Ttie  Lancashire  coal-field  is  almost  entirely 
surrounded  by  towns  engaged  in  the  cotton  trade;  the 
Staffordshire  fields  are  connected  chiefly  with  pottery,  and,  on 
their  southern  limit,  with  hardware  and  machinery;  the 
South  Wales  coal  district  is  noted  for  its  smelting  and  iron 
Avorks."^  These  concentrations  of  manufacture  built  np  fac- 
tory towns  black  with  smoke  and  humming  with  machinery. 
Population  also  shifted  so  much  that,  whereas  in  1750  the 
greatest  density  of  population  in  England  was  in  the  south- 
central  and  southwestern  counties,  it  is  now  in  the  north- 
central  and  northwestern  counties. 

Introduction  of  Di^ring  and  after  the  War  for  Independence, 
ch^ne^y  into^he  Americans  were  straining  every  nerve  to  estab- 
uuited  states,  y^^-^  manufactures  of  all  sorts  so  as  to  be  eco- 
nomically, as  well  as  politically,  independent  of  England. 
The  second  act  passed  by  Congress  under  the  Constitution 
was  one  which  laid  a  duty  on  imported  goods  "for  the  sup- 
port of  the  Government,  for  the  discharge  of  the  debts  of  the 
United  States,  and  for  the  encouragement  and  the  protection 
of  manufactures." 

But  the  mechanical  inventions  which  were  so  revolutioniz- 
ing manufactures  in  England  were  guarded  by  the  most 
stringent  legislation  and  the  most  vigilant  administration. 
All  exportation  of  the  machines  themselves,  of  models  and 
plans  of  the  same,  and  all  emigration  of  men  who  knew  how 
to  construct  and  use  them,  were  strictly  forbidden.  "So  the 
Americans  were  compelled  either  to  smuggle  or  to  invent 
their  machinery,  and  it  is  simply  a  matter  of  history  that  both 
methods  were  practiced  until  most  of  the  secrets  of  the  manu- 
facture of  cotton  goods  were  made  available  in  this  country. "  ^ 

The  stories  told  of  artisans  who  aided  in  the  establishment 
of  modern  machine  industry  in  the  United  States  are  many 
and  interesting,  but  we  must  confine  ourselves  to  two. 

'Gibbins,  pp.  350,  352,  454;  compare  Hobson,  ch.  iv. 
"Wright,  Industrial  Evolution  of  the  United  States,  pp.  123  and 
following. 


THE  FACTORY  PERIOD  OF  INDUSTRY  145 

It  is  related  that  Samuel  Slater  brought  to  America  an 
accurate  remembrance  of  the  details  of  certain  cotton  ma- 
chinery, and  made  the  first  complete  machines  used  in  this 
country,  in  Pawtucket,  Rhode  Island,  in  1790.  He  was  led 
to  this  effort  by  seeing  a  notice  in  an  American  newspaper 
describing  the  efforts  that  were  being  made  to  establish 
Buch  machinery,  and  mentioning  the  bounties  that  were  offered 
to  the  man  who  should  succeed. 

But,  even  with  the  introduction  of  cotton-spinning  machin- 
ery from  England,  and  the  invention  in  the  United  States  of 
the  cotton  gin,  without  which  the  development  of  cotton 
manufacture  must  have  been  very  slow,  the  United  States 
jtill  lacked  the  power  loom.  To  Mr.  Franci^C.  Lowell 
belongs  much  of  the  credit  of  introducing  this.  After  a  visit  to 
England  during  which  he  learned  as  much  as  possible,  he  built 
%  complete  factory  at  Waltham,  Massachusetts,  in  1811.  For 
the  loom  that  was  there  set  up,  Mr.  Lowell  had  neither  plans 
Qor  models.    Spinning  was  also  carried  on  in  the  same  factory. 

"This  factory  erected  at  "Waltham  was  the  first  in  the  world, 
so  far  as  any  record  shows,  in  which  all  the  processes  involved 
in  the  manufacture  of  goods,  from  the  raw  material  to  the 
finished  product,  were  carried  on  in  one  establishment  by 
successive  steps,  mathematically  considered,  under  one  har- 
monious system.  .  .  .  Few  changes  have  been  made  in  the 
arrangement  organized  at  the  Waltham  factory.  So,  while 
England  furnished  the  foundation  of  the  industrial  structure 
known  as  the  factory  system  of  manufacture,  America  fur- 
nished the  stone  which  completed  the  arch."  ^ 

The  importation  and  invention  of  modern  machinery  for  a 
great  variety  of  other  manufactures  has  also  gone  on  through- 
out the  century.  We  must,  therefore,  picture  to  ourselves  a 
later  but  similar  transition  in  the  L^nited  States  from  the  Homo 
and  Domestic  Systems  of  manufacture  to  the  Factory  System, 
which  has  already  been  mentioned  as  having  taken  place  in 
England. 

'Wright,  Induatrial  Evolution  of  the  United /States,  p.  131. 


146  OUTLINES  OF  INDUSTRIAL  HISTORY 

Increase  of    The    estimated  annual  value  of  our  manufac- 

'"prMent*^"  tui'es  in  1790  has  already  Ijeen  given  as  $20,- 
000,000,  most  of  which  went  on  in  the  homes  of 
citizens.  The  total  value  of  manufactured  products  for  1890, 
based  on  the  reports  of  the  Eleventh  Census,  is  $9,372,437,283. 
This  estimate  includes  the  value  of  all  raw  materials  in  each 
process  of  manufacture.  Furthermore,  as  the  finished  prod- 
uct of  one  transforming  process  often  forms  the  raw  material 
of  a  second,  and  the  finished  product  of  a  second  the  raw 
material  for  a  thh"d,  and  so  on,  it  will  be  seen  at  once  that 
the  total  value  of  manufactures  given  above  often  duplicates 
and  reduplicates  the  value  of  the  original  raw  materials.  This 
aggregate  value  of  manufactures,  therefore,  should  be  lessened 
by  these  raw  material  values  before  the  value  added  by  mere 
transforming  processes  will  appear.  This  can  not  be  accurately 
done.  The  figures  are,  therefore,  used  as  given,  with  this 
caution  as  to  their  meaning. 

All  of  this  manufacture  was  carried  on  outside  of  the 
homes  of  workers,  in  355,415  establishments  employing 
4,712,622  persons.  There  is  no  estimate  in  1890  of  the  value 
of  manufacture  which  still  goes  on  in  the  homes  of  the  work- 
ers. As  the  population  in  1790  was  3,929,214  persons,  and 
in  1890  was  62,622,250,  the  population  in  1890  was  not  six- 
teen times  as  numerous  as  it  was  a  century  earlier,  while  the 
value  of  manufactures  in  1890  was  more  than  4,686  times 
greater  than  in  1790.  7  ' 

Massachusetts  alone  produced  25.62  per  cent  of  the  total 
--textile  manufacture  of  the  United  States  in  1890;  the  Ne\v 
England  States  together,  50. 64  per  cent ;  and  the  Now  Eng- 
land and  Middle  States  together,  89.37  per  cent.  An  indica- 
tion of  the  growing  importance  of  the  Southern  States  as  a 
new  center  of  cotton  manufacture  is  found  in  the  fact  that, 
while  from  1880  to  1890  the  value  of  the  textile  manufactures 
of  New  England  increased  only  30.61  per  cent,  the  value  of 
the  same  product  of  the  Southern  States  increased  143.99  per 
cent. 


THE   FACTORY  PERIOD   OF  INDUSTRY  147 

The  irou  and  steel  industries  are  chiefly  concentrated  in 
Pennsylvania,  Ohio,  Alabama,  Illinois,  and  New  York. 
Taking  manufactures  as  a  whole,  the  first  five  states  in  order, 
according  to  the  value  of  their  manufactures  in  1890,  were 
Xew  Yprkj^Pennsylvania,' Illinois, "Massachusetts,  and  Ohio. 
These  five  had  more  than  half  the  total  number  of  manufac-  /  J  so_ 
turing  establishments  and  produced  more  than  one-half  of 
the  total  product  of  the  United  States  in  1890.  At  this  date 
the  geographical  center  of  the  manufacturing  industries  of 
the  country  as  a  whole  was  within  ten  miles  of  Canton,  Ohio. 

///.  DEVELOPMEXT  OF  TEANSPORTATlOy  FACILITIES 

English  Trans-  The   most    important  English  canals  included 
*'uie*Vrevious"one   from  Worsley  to    IVIaiich ester,  seven  miles 
long;    one  from  the  river  Trent  to  the  Mersey, 
ninety-six  miles  long;   also  other  canals  connecting  Hull  with 
Liverpool,  Liverpool  with  Bristol,  and  London  with  Oxford 
and  other  towns  in  the  Midlands.^     The  improvement  of  turn- 
pikes also  went  on,  and,  under  the  skilful  direction  of  men       /? 
like  Telford  and  Macadam  reached  a  high  degree  of  perfection    cJ~^< 
early  in  the  nineteenth  century.     Tha  transportation  of  pas- 
sengers  by  coach   became   general,  and  as  comfortable  and  ' 
rapid  as  the  nature  of  this  means  of  transportation  permitted. 
A  comparatively  small  number  of   persons  ever  traveled  for 
pleasure.     The  canals  continued  to  be  the  principal  thorough' 
fares  for  iutenuil   transportation  of   heavy  goods,   especially 
coal . 

The  Growth  of  "The  first  line  which  carried  passengers  and 
Avay'^iiiuicaViai  upou  whicli  locomotivo  steam  engines  were  used 
rai.sporvu  ion.  ^^^g  tho  Stockton  and  Darlington  Railway 
(opened  in  182ii),  while  the  first  to  strongly  attract  public 
attention  and  afford  some  real  inkling  of  future  possibilities 
was  the  Liverpool  and  Manchester  line,  opened  in  1830."^ 
l}y  1840  there  were  800  miles  of  railway  constructed  in  Great 

'Gibbins,  pp.  355,  356. 

^Taylor,  p,  IjOS. 


148 


OUTLINES  OF  INDUSTRIAL  HISTORY 


Britain.     The  following  table  shows  the  number  of  miles  in 
operation  at  the  end  of  each  decade  thereafter : 


Year. 

Miles. 

Year. 

Miles. 

Year. 

Miles. 

1850 
1860 

6,621 
10,433 

1870 

1880 

1 

15,537 
17,933 

1890 
1895 

20,073 
21,174 

Of  this  mileage  in  1895,  14,G51  miles  were  in  England  and 
Wales,  3,350  miles  in  Scotland,  and  3,173  miles  in  Ireland."^ 
In  1888,  there  was  also  a  total  of  3,813  miles  of  canals  in 
use  in  Great  Britain.  In  1894,  this  canal  system  was  made 
vastly  more  effective  by  the  completion  of  the  Manchester 
Ship  Canal,  26  feet  deep,  120  feet  in  bottom  width,  and  35^ 
miles  long.  This  canal  brings  the  whole  Internal  system  of 
canals  in  the  neighborhood  of  Manchester  into  direct  connec- 
tion with  sea-going  vessels. 

Transportation  Late  in  the  eighteenth  century,  and  during 
state8*':^eviSu8  the  first  quarter  of  the  nineteenth,  the  prac- 
to  1830.  ^-^g  ^^  building  turnpike  roads,  constructed 
and  maintained  by  tolls,  became  frequent  in  the  United 
States.  A  national  effort  was  also  made  to  connect  the  states 
west  of  the  Alleghany  jVIountains  with  the  Atlantic  States  by 
a  great  government  road,  called  the  Cumherland  Eoad,  In 
180G,  Congress  made  its  fii'st  appropriation  for  this  road;  and, 
during  the  next  thu'ty  years,  in  spite  of  the  opposition  of  the 
strict-constructionist  members  of  Congress,  who  did  not 
believe  Congress  had  power  to  support  internal  improvements, 
the  Cumberland  Road  was  extended  from  AVashington 
through  Cumherland  and  Wheeling,  to  the  Mississippi  River, 
After  1790,  many  canals  were  projected  and  a  less  number 
constructed.  New  York,  Pennsylvania,  Ohio,  Indiana,  Illi- 
nois, and  Virginia  were  the  most  active  in  this  construction. 
The  Erie  Canal,  opened  in  1825,  and  connecting  the  Hudson 
River   with  Lake  Erie,   has  proved  the   most  important  of 

^The  Statesman's  Year-Book,  1897,  p.  90. 


THE  FACTORY  PERIOD  OF  INDUSTRY 


149 


these  canals.     Most  of  the  canals  actually  constructed  did  not 
prove  of  great  importance  after  railways  were  introduced. 

The  Mississippi  River  and  its  tributaries,  and  the  Great 
Lakes,  were  utilized  from  the  very  beginning,  as  means  of 
communication  west  of  the  AUeghanies.  As  soon  as  steam 
was  applied  to  boats,  the  use  of  steamboats  was  gi-adually 
introduced  upon  the  waters  of  this  gi'eat  region,  and  helped 
materially  towards  its  settlement  and  the  marketing  of  its 
produce. 
The  Extension  In  spitc  of  all  cfforts  that  could  be  put  forth, 
of  Ra'^iroa  s  in  j-,Q^rgygi.^  i\^q  general  transportation  of  passengers 
United  states.  ^^^^  goods  was  slow  and  expensive  business  in  the 
United  States  previous  to  the  era  of  railways.  The  beginning 
of  this  era  was  practically  the  same  in  the  United  States  as  in 
England.  The  first  road  of  importance  carrying  passengers 
and  goods,  was  a  part  of  the  Baltimore  &  Ohio  Railway,  com- 
pleted in  1830.  According  to  Poor's  Manunl  of  Raih'oarls,^ 
the  following  table  gives  the  number  of  miles  of  railway  in 
operation  at  the  end  of  each  decade  since  that  time: 


Year. 

Miles. 

Year. 

Miles. 

Year. 

Miles. 

1830 
1840 
1850 

23 

2,818 
9,021 

1860 
1870 
1880 

30,626 
52,922 
93,296 

1890 
1895 

166,698 
181,021 

/  ^.^-tl 

1-/  /,3'f  / 

Sii 


Previous  to  1850,  practically  all  the  railway  west  of  the 
Atlantic  States  was  about  fifteen  hundred  miles.  The  table 
on  the  following  page  gives  the  distribution  of  railways  at  the 
end  of  each  decade  since  1850.  ^ 

These  two  tables  suggest  the  rapidity  with  which  the  suc- 
cessive waves  of  railroad  construction  swept  over  the  country 
from  east  to  west,  and,  since  1860,  from  the  Pacific  eastward 
as  well.  How  the  character  of  these  roads  changed  from  short 
local  enterprises,  radiating  from  the  principal  Atlantic  cities, 

'1896,  p.  XX. 

'Poor,  Manual,  1896,  p.  xxi. 


150 


OUTLINES  OF  INDUSTRIAL  HISTOEY 


until  they  have  become  the  great  transcontinental  lines  with 
which  we  are  familiar,  is  a  fascinating  study  in  itself.  Most 
of  this  consolidation  has  taken  place  since  1850.^ 


Groups  of 
States. 

1850. 

1860. 

1870. 

1880. 

1890. 

1895.       ]'iOO 

New  England... 
Middle 

2.507 
3,105 
1,276 
1,717 

416 

3,660 
6,353 
9,583 
5,463 

3,727 

1,162 

655 

23 

30,626 

4,494 
10,577 

14,701 
6,481 

5,106 
4,625 
5,004 
1,934 
52,922 

5,977 
15,181 
25, 109 

8,474 

6,995 
14,085 
12,347 

5,128 
93,296 

6,831.90 
20,103.72 
36,926.68 
17,300.59 

13,342.66 

32,887.95 

27,294.36 

12,009.64 

166,697.50 

—# 

7,224.65  7/0' 

21  704  7S  x>  3?^ 

Cent" I  Northern 
South  Atlantic 
Gulf  and   Miss- 
issippi Valley.. 
South  Western.. 

39,393.52  t^^/ 3 
19,967.63  2./^^  ». 

14,442.13/6.^*/^ 
34,912.04  37  J-* 
29,465.063* /o 
13,911. 10 /J- :?§ 

181,020.93;;^^ 

North  Western.. 

Pacific 

United  States... 

9,021 

[Note. — These  statistics  afford  good  material  for  diagrams.] 
These  consolidations  and  other  changes  in  railway  con- 
'  struction  and  management  have  so  reduced  freight  rates  that 
"the  average  charge  for  carrying  one  ton  of  freight  one  mile 
is  now  [1894]  a  little  less  than  one  cent.  In  the  decade  1850- 
1860,  it  was  three  cents  or  more."^  Before  the  era  of  rail- 
ways, the  pate  of  transportation  of  heavy  freight,  like  coal  and 
farm  jiroduce,  by  land,  was  practically  prohibitive  for  long 
distances. 

'  *'"    Recent        Prcvious  to  1840,  ouly  a  few  oceanic  passages 
Changes  in  the  by  stcamship  had  been  made.    Durinsr  1838,  the 

racilitie.s  for      ^  o  ' 

Transportation  Great  Wcstem  and  the  Sirius  made  trips,  one 

by  Water.  ^    ' 

from  Liverpool  and  one  from  Cork.  The  follow- 
ing table  gives  the  total  registered  tonnage  of  ,.£diish  vessels 
for  each  decade  since  1840.^  From  this  table  it  will  be  seen 
that  the  substitution  of  steamships  for  sailing  vessels  did  not  go 
on  very  fast  until  after  1860.     The  substitution  that  has  since 


»Poor,  1894,  pp.  1356  and  followhig;  also  1896,  pp.  85  and  follo^v- 
ing. 

^Cooley,  The  United  States  of  America,  edited  by  N.  S.  Shaler, 
vol.  II,  p.  74—1894,  D.  Appleton  &  Co.,  New  York. 

^Jlie  Statesman's  Year-Book,  1897,  p.  xxiv. 


THE  FACTORY  PERIOD  OF  INDUSTRY 


151 


taken  place  will  appear  all  the  more  significant  when  we 
remember  that  the  carrying  power  of  a  steamship  of  the  same 
tonnage  as  a  sailing  vessel  is  several  times  greater.  Mr.  Mul- 
hall '  puts  this  superiority  of  a  steamship  over  a  sailing  vessel 
at  four  hundred  per  cent.  ^^i 


Years. 

Registered  Tonnage. 

Years. 

Registered  Tonnage. 

Sailing. 

Steam. 

Sailing. 

Steam. 

1840 
1850 
1860 

2,680,334 
3,396,659 
4,204,360 

87,928 
168,474 
454,327 

1870 
1880 
1890 

4,577,855 
3,851,045 
2,936,021 

1,112.934 

2,723,468 
5,042,517"^ 

Until  about  1860,  American  shipping  was,  in  the  main, 
successful  in  gaining  a  fair  share  of  the  ocean  carrying  trade. 
The  total  tonnage  of  our  coasting  fleet  at  that  date  was  a  little 
over  two  and  one-half  million  tons,  and  the  tonnage  of  vessels 
carrying  on  foreign  trade  was  a  little  less  than  two  and  one- 
half  million  tons.  Since  1860,  and  since  iron  and  steel 
clad  vessels,  di'iven  by  steam,  have  been  constructed,  the 
United  States  has  lost  most  of  the  ocean  carrying  business. 
In  1896,  the  registered  tonnage  of  American  vessels  was  as 
follows. 

Tons. 

Sailing  vessels  (including  canal  boats  and  barges) 2,396,672 

Steam  vessels 2,307,208 

Total 4,703,880 

Total  tonnage  registered  in  foreign  trade 829,833 

Total  tonnage  in  coasting  trade,  on  Great  Lakes  and 

western  rivers 3,874,047 

These  statistics,  taken  as  a  whole,  and  especially  those  for 
the  British  steam  vessels,  suggest  a  statement  the  truth  of 
which  few  people  realize.  The  present  facilities  for  rapid 
oceanic  transportation  of  persons  and  merchandise  have  prac- 
tically all  l)een  developed  within  the  last  thirty  or  forty  years. 

'Mulhall,  Indiifitries  mid  Wealth  of  Nations,  p.  43 — 1896,  Long- 
mans, Green,  &  Co.,  New  York. 


^ — 


152  OUTLINES  OF  INDUSTRIAL  HISTORY 

The  memory  of  persons  hardly  past  the  prime  of  life  covers 
the  whole  period  of  intercontinental  steam  transportation. 
The  signifi-    Wc  have  already  pictured  the  eighteenth  century 

canceof  Modern  ,  ...  •         -m       i        t  ,    i  •  , 

Facilities  for   transportation     m    England    as    taking    place 

Transportation  •    ■,        ■,  ,i  :!••       j!      •      ^         i        •  , 

on  Land  and  mainly  along  tlic  radii  of  circles  having  towns 
as  their  centers,  with  comparatively  little  traffic 
between  one  large  town  and  another.  This  limitation  upon 
land  transportation  has,  until  the  nineteenth  century,  made  it 
necessary  for  each  local  community  having  a  radius  of  a  few 
miles  to  produce  for  itself  most  of  its  staple  goods.  Almost 
all  the  industries  necessary  for  the  simple  life  of  a  people  have, 
until  recent  years,  been  carried  on  within  a  comparatively 
short  distance  from  the  homes  of  consumers.  Now  almost 
any  product,  including  fresh  meat,  can  be  consumed  thou- 
sands of  miles  away  from  the  place  where  it  was  produced. 
So  far  as  transportation  is  concerned,  the  civilized  world  car 
now  be  supplied  with  products  from  those  places  where  they  can 
be  produced  most  cheaply  and  of  most  satisfactory  quality. 
As  a  consequence,  the  natural  resources  of  the  earth  in  soil, 
climate,  mine,  and  forest  can  be  utilized  to-day  as  nevei 
before.  For  example,  while  it  was  once  necessary  for  the  men 
of  Kew  England,  Pennsylvania,  Kansas,  Georgia,  and  Dakota 
to  furnish  their  own  clothing,  fuel,  beef  and  corn,  building 
materials,  and  wheat,  each  from  his  own  narrow  territory,  now' 
cloth  from  New  England  looms,  coal  from  the  mines  of  Pennsyl- 
vania, beef  and  corn  from  the  Kansas  prahies,  pine  from  the 
forests  of  Georgia,  and  wheat  from  the  Eed  Eiver  valley  of 
Dakota,  are  commonly  used  not  only  in  all  these  states  but  all 
over  the  country.  The  old  economic  isolation  of  one  region 
from  another  has  given  place  to  an  era  when  East,  Xorth, 
South,  and  West  are  bound  together  by  an  intricate  network 
of  steel  rails  over  which,  in  every  direction,  are  constantly 
hurled  ponderous  freight-train  projectiles  loaded  with  the  best 
products  of  each  section  to  be  distributed  to  all.  Xor  is  this 
interchange  of  wealth  and  services  confined  to  the  parts  of  a 
single  country.     The  newspapers  are  full  of  projects  for  thf 


THE   FACTORY  PERIOD  OF  INDUSTRY  153 

combination  of  transcontinentul  lines  of  railway  with  transl^/^ 
oceanic  lines  of  steamships,  so  that  the  time  required  for  o^c^.a'--^ 
man's  product  to  be  laid  at  the  doors  of  a  consuming  world  "rr/v 
may  be  yet  further  shortened,  and  side  by  side  with  tins 
marvelous  development  in  the  means  of  transportation  of 
goods  and  persons  is  also  developing  the  still  more  wonderful 
facility  of  transmission  of  ideas;  already  by  means  of  tele- 
phone, cable,  modern  telegraphy  with  wires,  wireless  teleg-/ 
raphy,  the  telautograph,  etc.,  the  whole  civilized  world  quivers 
with  the  transferrence  of  thought  like  the  nervous  system  of 
the  human  body. 

In  a  word,  electric  thought  transmission  and  steam  trans- 
portation on  land  and  sea  are  fast  creating  a  division  of  labor, 
on  a  world  scale,  among  places,  and  have  already  made  the 
nineteenth  century  differ  more  from  the  eighteenth  than  the 
eighteenth  differed  from  that  of  the  pyramid  builders  of  Egypt. 

In  this  connection  Mr.  Mulhall  makes  an  interesting  compu- 
tation. He  states  that  the  number  of  foot-tons  of  power  now 
used  in  transportation  is  much  greater  than  the  number  used 
in  production.     His  figures  are  as  follows.  ^ 


Years. 


1840. 
1895. 


Millions  of  Foot-Tons  Used  Daily. 


Production. 


73,700 
174,120 


Distribution. 


50,300 
266,840 


It  is  impossible  that  these  figures  should  state  the  truth 
with  minute  accuracy,  but  there  can  be  no  doubt  that  they 
reveal  a  gi'eat  truth.  Hand  in  hand  with  this  new  facility  to 
travel  and  to  transport  goods,  goes  the  new  facility  for  inter- 
change of  thought,  so  that  the  "commercialism"  of  the  time 
is  necessarily  connected  with  a  larger,  many-sided  thought  and 
soul  life.  Something  of  all  this  marvelous  possibility  of 
touching  the  life  of  man  in  all  parts  of  the  world — of  actual 

>Mulhall,  p.  20. 


154  OUTLINES  OF  INDUSTRIAL  HISTORY 

connection,  through  the  exchange  of  services  and  of  wealth, 
with  all  mankind — must  have  been  deeply  felt  by  Tennyson 
when  he  wrote : 

"Better  fifty  years  of  Europe 
Than  a  cycle  of  Cathay." 

1/  IV.  DEVELOPMENT  OF  EXTRACTIVE  IND  USTEIES 

In  spite  of  all  the  enclosure  that  had  taken  place 

Enclosure  of  -,  t   ^ 

the  Common    for    the  establishment  of  sheep-farms,  and  to 

Fields  in  Eng-  -iititiii 

land  in  the     allow  of  couvertiblc  husbandi'v,  we  have  already 

Eighteenth  and  ,  ,  i  .    t      -      ,  n   ^ -, 

Nineteenth  seen  that  about  one-third  of  the  common  nelds 
remained  unenclosed  until  the  eighteenth  cen- 
tury. These  fields  were  still  cultivated  very  much  as  they  had 
been  in  the  time  of  King  William  I.  (1066-1087).  But,  upon 
the  land  which  had  been  enclosed,  convertible  husbandry  was 
tending  toward  imjDrovements  of  many  kinds  in  agriculture. 
Chief  among  these  was  a  more  or  less  scientific  rotation  of  crops, 
including  roots  and  clover.  Drainage  was  also  making  its 
way.  Accordingly,  in  the  eighteenth  century,  the  idea  of 
improvement  in  agriculture  slowly  gained  ground,  so  that  the 
task  of  enclosing  the  remainder  of  the  common  fields  was 
resumed  to  make  way  for  better  tillage. 

Mr.  Toynbee  tells  us  ^  that,  from  1710  to  1760,  this  movement 
was  so  slow  that  only  300,000  acres  were  enclosed,  but  that, 
from  1760  to  1843,  nearly  7,000,000  acres  were  enclosed. 
These  changes  bore  hard  upon  the  small  farmers,  and  greatly 
reduced  the  number  of  men,  who,  as  freeholders,  copy- 
holders, and  small  tenants,  had  hitherto  remained  in  vital 
contact  with  the  soil.  "Enclosures  brought  an  extension  of 
arable  cultivation,  and  the  tillage  of  inferior  soils,  and  in 
small  farms  of  forty  to  one  hundred  acres,  where  the  land  was 
exhausted  by  repeated  corn  crops,  the  farm  buildings  of  clay 
and  mud  walls,  and  three-fourths  of  the  estate  often  saturated 
with  water,  consolidation  into  farms  of  100  to  500  acres  meant 
rotation  of   crops,  leases  of  nineteen  years,  and  good  farm 

'pp.  88  and  following. 


THE  FACTORY  PERIOD  OF  INDUSTRY  155 

buildings.     The  period  was  one  of  great  agricultural  advance; 
the  breed  of  cattle  was  improved,  rotation  of  crops  was  gener- 
ally introduced,  the  steam-plough  was  invented,   and  agri- 
cultural societies  were  instituted."^ 
oeoreasein    Tlicso   cliauges   iu    agricultural    methods,   the 
AericuUurai    phenomenal  rise  of  manufactures,  the  growing 
^^land.         importance  of  the  transporters,  transferrers,  and 
servants,   together   with    the  industrial   development   in   the 
whole  civilized  world — both  the  purely  economic  development 
and  this  developmeut  as  it  was  modified  by  the  legislation  of 
England  and  other  countries — caused  a  decline  in  the  agri- 
cultural classes  when  compared  with  the  total  population. 

AVe  have  already  given  an  estimate  for  1688,  which  showed 
over  eighty-nine  per  cent  as  engaged  in  agriculture.  Ee- 
membering  tlie  comments  already  made  upon  these  figures, 
and  also  bearing  in  mind  that  a  greater  amount  of  manufac- 
ture was  then  carried  on  in  the  homes  of  the  farmers  than  at 
present,  we  may  give  still  further  estimates  and  census  reports 
for  comparison. 

Arthur  Young's  estimate  for  ITGO  was  as  follows:^ 

Agricultural  classes 3,000,000 

Manufacturing  classes 8,000,000 

Commerce 700,000 

Professional  classes 200,000 

Paupers 600,000 

Military  and  official  classes 500,000 

Total  8,000,000 

[Note. — Compare  diagram  of  these  statistics  of  occupations 
with  those  previously  made.] 

This  gives  over  forty-one  per  cent  engaged  in  agriculture 
seven  hundred  years  after  the  Domesday  Survey.  The  decline 
in  percentage  of  the  total  population  engaged  in  agriculture 
continued  during  the  first  of  the  nineteenth  century  as  follows :  ^ 

•Toynbee,  p.  89. 
^  Hohson,  pp.  21,  22. 

'Toynbee,  p.  88.  Compare  Gibblns,  p.  446,  and  lite  Statesman's 
Year-Book,  1897,  pp.  19,  20. 


2 


156  OUTLINES  OF  INDUSTRIAL  HISTORY 

1811  35  percent. 

1821  33  percent. 

1831  28  percent. 

Later  figures  show  periods,  not  only  of  relative,  but  of  abso- 
lute, decline  in  the  numbers  of  agricultural  laborers  in  Great 
Britain.  The  census  returns  show  that  70.4  per  cent  of  tbe 
total  population  of  England  and  Wales  in  1891  lived  in  towns 
and  cities  of  over  3,000  people.  The  same  census  gives  only 
12.1  per  cent  of  all  males  over  ten  years  old  in  England  and 
Wales  as  engaged  in  agriculture  and  fishing. 

These  facts  are  of  profound  significance,  as  they  suggest  not 
only  the  modern  tendency  of  population  in  civilized  countries 
toward  the  towns  and  cities,  but  also  something  of  the  extent 
to  which  the  workers  of  England  have  been  withdrawn  from 
direct  production  of  a  food  supjoly. 

Generalizations  The  wholc  period  siuce  the  Conquest,  from  the 
EngiJsh*A'gri-  point  of  view  of   English  agriculture,  can  be 
divided  into  three  sub-periods :  ^ 

1.  A  period  of  universal  open-field  agriculture. 

2.  A  period  when  the  open-field  system  had  been  partially 
supplanted  by  sheep  pasturing  and  convertible  husbandry  in 
enclosed  fields. 

3.  A  period  when  the  open-field  system  has  entirely  disap- 
peared, and  the  enclosed  fields  are  wholly  devoted  to  pas- 
turage, convertible  husbandry,  and  to  the  modern  intensive 
agriculture,  known  as  the  rotation  of  crops. 

In  the  last  period  only  has  scientific  farming  been  at  all 
common,  or  even  possible.  The  gradual  passage  from  the 
first  of  these  systems  to  the  last  has  been  accompanied  by  a 
decrease  in  the  ratio  between  the  agricultural  and  total 
populations. 

The  natural  fertility  of  much  of  the  soil  in  the 

Agriculture  in  .  ,  .        ,  ■  ^        ^ 

the  United      United   fetates,   combined    with  the   ease   with 

v.'hich  men  could  acquire  ownership  of  shares  of 

the  public  land,  has  made  the  ratio  of  farmers  to  the  total 

^Ashley,  vol.  II,  p.  263. 


THE  FACTORY  PERIOD   OF  INDUSTRY  15? 

population  very  large  in  this  country,  and  has  tended  to  make 
the  methods  of  tillage  careless  and  wasteful.  "Our  extensive 
agi'iculture  has  converted  a  portion  of  the  natural  fertility  of 
our  soils  into  other  kinds  of  wealth  that  were  less  abundant. 
In  the  older  sections  of  the  country,  intensive  cultivation  has 
long  been  practiced.  After  the  great  staple  crops  of  corn  and 
wheat  have  been  raised  for  successive  years  with  the  smallest 
expenditure  of  capital  and  labor,  the  soil  becomes  perceptibly 
impoverished ;  and  the  production  of  grain  nioves  steadily 
westward  toward_  unoccupied  territory.  Then,  on  the  older 
lands  of  the  East  begins  a  more  careful,  intensive  cultivation 
of  smaller  crops,  vegetables,  fruits  or  grass  for  the  support  of 
the  dairy.  On  the  better  portion  of  these  lands,  cereal  croj^s 
ai'e  still  raised  by  higher  cultivation,  while  the  poorer  soils  are 
often  allowed  to  revert  to  forest.  In  the  vicinity  of  towns  and 
cities,  market-gardening  allows  a  still  more  intensive  applica- 
tion of  labor  and  capital."  ^ 

In  the  very  nature  of  the  case,  as  population  increases  and 
new  lands  give  out,  intensive  methods  must  gradually 
encroach  upon  the  great  grain  fields  and  ranches  of  the 
country.  Thus  far,  the  great  areas  cultivated  by  our  extensive 
agi'iculture  have  necessitated  the  use  of  more  agricultural 
machinery  than  is  used  in  any  other  land.  Most  of  this  has 
been  invented  and  manufactured  in  the  United  States.  "When 
once  perfected,  small  farmers  also  often  reap  the  benefit  of  the 
use  of  such  machinery  by  neighborhood  ownership  of  drills, 
harvesters,  etc.  The  total  value  of  the  farm  product  in  1889 
was  $2,460,107,454. 

In  comparison  with  England,  the  ratio  of  our  agricultural 
population  to  the  total  is  very  large.  Of  the  22,7:35,001  men 
and  women  reported  by  the  census  of  1890  to  be  engaged  in 
gainful  occupations,  8,406,251,  or  over  37  per  cent,  were 
engaged  in  agriculture. 

Although  this  per  cent  is  still  large,  yet  the  tendency  of 
urban  population  to  increase  faster  than  rural  is  as  evident  in 

'Bullock,  pp.  42,  43. 


t*-^:- 


158  OUTLINES  OF  INDUSTRIAL  HISTORY 

the  United  States  as  iu  England.     The  3.35  per  cent  living 

in  towns  of  8,000  people  and  over,  in  1790,  did  not  increase  to 

XQ.  per  cent  nntil  after  1840.     In  1890,  the  urban  population 

T    in  cities  of  the  same  size  was  29.2  per  cent  of  the  total. 

^.:  ■'  The  motive  power  of  steam  began  to  revolu- 

E^s'iand?      tionize  coal  and  iron  mining  in  England  during 

the  last   of    the    eighteenth   century.      Steam 

power  was  used  to  clear  the  mines  of  water,  to  sink  shafts,  to 

raise  coal  and  ore  from  the  mines,  and  to  furnish  blasts  of  air 

for  the  furnaces.    When  the  new  motive  power  was  applied  to 

land  transportation  by  means  of  locomotives,  the  revolution 

was  comjDlete.     In  1895,  the  production  of  coal  and  iron  in 

the  United  Kingdom  was  as  follows :  ^ 

Iron  ore,  12,015,414  tons,  which  yielded  4,394,987  tons  of 
metal. 

Coal,  189,601,362  tons. 

"The  total  number  of  persons  employed  in  and  about  all 
mines  in  the  United  Kingdom,  in  1895,  was  733,057;  of  this 
number,  584,298  were  employed  undergi'ound." 

Because  of  the  stress  of  the  task  of  appropri- 

in  the        ating  a  new  continent,  the  mining  interests  oi  tne 

United  States,  like  the  manufacturing  interests, 

were  developed  comparatively  late.     "With  the  exception  of 

gold   in  the  Carolinas  and  Georgia,  of  small  quantities   of 

various  other  minerals,  and  of  comparatively  small  amounts  of 

coal   and  iron,  the  mineral  resources  of  the   country  were 

hardly  touched  in  1850.     Since  1800,  the  development  has 

^/^'    been  rapid.     The  census  of  1890  gives  a  total  of  fifty -foiir 

>  ^.  -s    mineral  products,  having  a  total  value  of  $587,230,602,  which 

were  mined  in  18S9.     In  1890,  these  mines  required  the  labor 

of  387,246  persons,  208,549  of  them  being  coal  miners. 

Of  course,  ihe  lumber  business  of  Great  Britain 

^'nd*^       is  insignificant.     In  the  United  States,  however, 

Lumbering.    ^^^^  ^^^^^  pioducts  01  the  forests  for  1889  were 

valued   at   $446,034,701.     Over  $400,000,000  of  this  value 

*I7ie  Statesman's  Year-Book,  pp.  73,  73- 


THE  FACTORY  PERIOD   OF  INDUSTRY  159 

represents  products  whieh  had  gone  through  various  trans- 
forming processes  of  mill,  lathe,  etc.  The  number  of  men  in 
1890  directly  occupied  in  chopping  and  getting  out  logs 
from  the  forests  was  99,o51. 

The  products  of  the  fisheries  for  1889,  including  oysters, 
were  valued  at  84.2,277, 51-4.  In  1890,  there  were  G0,15U 
persons  engaged  in  these  industries. 

In  Great  Britain,  tne  value  of  fish,  including  shellfish, 
landed  in  1890,  was  7,435,199  pounds  sterling.  In  1894, 
the  British  fisheries  employed  121,978  men. 

K   V.  TBAXSFEERiyG  INDUSTRIES:    CHANGES  IN  EXTENT  AND  METHODS  OF 

TRADE 

The  Growing  It  has  already  been  pointed  out  that,  previous  to 
e'uce  oTjien'  the  era  of  steam  locomotion,  nations  themselves, 
and  Nations.  ^^^^  e\Qn  local  arcas  within  nations,  were,  to 
a  great  degree,  self-sufiBcing  in  respect  to  the  great  staple 
commodities  which  furnish  men  with  food,  clothing,  and 
shelter.  As  occupations  differentiated,  more  local  trade  took 
place,  and  as  means  for  transportation,  both  of  goods  and  of 
ideas,  have  become  international,  the  humblest  homes  gather, 
from  many  latitudes  and  from  many  lands,  the  various  prod- 
ucts which  are  daily  consumed. 

The  variety  stores  of  country  villages,  where  all  sorts  of 
commodities  may  be  bought  at  any  time,  are  a  comj^aratively 
new  economic  institution  in  the  world.     Staple  goods  of  an 
English  community  were  exchanged  in  towns  on  market  djys,^^ 
and  goods  not  so  exchanged  were  to  bo  bought  only  at  peri-    .^  ^^^ 
odical  fairs  or  in  the  largest  towns,  until  toward  the  close  of 
the  eighteenth  century.     "Till  the  epoch  of  modern  railways,!' 
in  fact,  fairs  were  a  necessity,  though  now  the  rapidity  of  loco-  u 
motion,  and  the  facility  with  which  goods  can  be  ordered  and  ' 
dispatched,  have  annihilated  their  utility  and  rendered  their 
relics  a  nuisance."  ^ 

'Gibbins,  p.  141. 


160  OUTLINES  OF  INDUSTRIAL  HISTORY 

"The  trader  did  not  exist  in  the  villages.  In  most  vil- 
lages, he  hardly  existed  at  the  beginning  of  the  present  [nine- 
teenth] century.  In  my  native  village,  the  first  shop  was 
opened,  for  general  trade,  about  sixty  years  ago,  as  I  have 
heard,  and  for  many  years  afterward,  the  wants  of  the  vil- 
lagers were  supplied  by  packmen  and  pedlars,  or,  in  the 
case  of  the  more  opulent,  by  carts,  which  came  periodically 
from  the  nearest  towns  for  orders."^ 

"In  1G96,  Massachusetts  confined  the  marketing  in  Boston 
to  Tuesdays,  Thursdays,  and  Saturdays,  at  such  places  as  a 
majority  of  the  justices  of  the  peace  might  define."^  Bristol 
allowed  marketing  only  on  Thursdays,  in  1G93. 

Faneuil  Hall,  erected  in  1740,  was  the  first  daily  and 
permanent  market  that  Boston  had.  "New  Hampshire 
appointed  market  and  fair  days  in  May  and  October,  at 
Hampton  Falls,  in  1734."  ' 

_^  VI.    SERVANTS 

The    number    of    services    performed    by  the 

Specialization  •  i  i 

In  tiiis  Group  of  medieval    clergy  has   already  been  mentioned. 

Occupations. ~^'~  •' 

Other  illustrations  of  the  lack  of  separation 
between  different  groups  of  occupations  abound.  Mr.  Rogers 
says :  "When  the  King  dismisses  his  parliament,  in  the  middle 
ages,  he  sends  nobles  to  their  sports,  the  commons  to  their  har- 
vests, and  makes  no  distinction  between  knights  of  the  shire 
and  burgesses.  So,  we  are  told,  the  long  vacation  in  the  courts 
and  the  universities  Avaa^^xtended  from  July  to  October,  in 
order  that  such  persons  as  followed  the  pursuits  of  law  and 
letters  might  have  ample  leisure  for  the  all-important  work  of 
the  harvest."*  Thus  statesmanship,  law,  and  education  were 
closely   connected    with    agriculture.       Education    and    the 

'Rogers,  p.  147. 
^Weeden,  vol.  I,  p.  406. 
3The  same,  vol.  II,  pp.  524-526. 
^Rogers,  p.  122. 


THE  FACTORY  PERIOD  OF  INDUSTRY  161 

church,  and  the  churcli  and  state  are  not  yet  distinct  in  Eng- 
land. In  America  also,  Avith  some  religious  denominations, 
education  and  the  church  go  hand  in  hand.  In  general,  how- 
ever, it  may  truthfully  be  said,  that  the  nineteenth  century  has 
seen  more^specialization  of  this  whole  group  of  occupations 
from  other  groups,  and  more  specialization  of  class  from  class 
within  the  gi'onp  than  was  ever  known  before. 

In  education,  the  rise  of  the  public  school  S3'stem  of  the 
Ignited  States,  from  the  kindergarten  to  the  university,  is 
developing  specialists  all  along  the  line.  A  similar  develop- 
ment is  going  on  in  England. 

In  municipal  and  national  government,  the  civil  service  is 
coming  to  be  composed  of  specialized  and  relatively  permanent 
public  servants.  Democracy  has  made  real  progress  in  the 
nineteenth  century. 

The  whole  field  of  the  physicaLsciences  has  been  divided  up 
between  scores  of  groups  of  special  scientists.  The_social 
sciences  are  now  in  process  of  a  similar  survey  and  partition. 
Medicine  is  remarkably  specialized.  Skilled  personal  services 
of  all  kinds  can  be  obtained  as  never  before.  Music,  books, 
and  pictures,  are  bringing  the  inspiration  of  the  most  gifted 
servants  of  the  century  within  the  reach  of  all,  as  never  before 
in  the  history  of  the  world. 

The  ratio  of  those  who  produce  services  to  those  who  pro- 
duce wealth  has  increased  during  this  period,  and  the  eco- 
nomic significance  of  such  production  is  becoming  more 
frankly  recognized  than  formerly.  If  accurate  statistics  weni 
available  to  show  jirecisely  how  many  persons,  in  comparison 
with  the  total  population,  have,  in  successive  centuries,  been 
spared  from  immediate  material  production  to  produce  per- 
sonal, domestic,  professional,  educational,  scientific,  and  artis- 
tic services,  it  would  reveal  much  respecting  the  economic 
progress  of  America  and  England.  The  absolute  number 
)t  servants  of  all  sorts  is  now  very  large  in  England  and  the 
United  States.  In  comparison  with  the  early  life  of  each 
country,  the  present  aljundance  and  variety  of  services  are  of 


162  OUTLINES  OF  INDUSTRIAL  HISTORY 

untold  value  in  making  human  life  more  varied,  free,  and 
altogether  enjoyable/ 

Domestic  service  is  not  yet  adjusted  to  the  ideals  of  modern 
life."^  Still,  it  should  be  pointed  out,  that  the  days  of  legal 
indentured  servants  and  of  slavery  are  past.  Servants,  like 
wage-earners  in  material  production,  are  politically  free.  The 
problems  of  the  economic  freedom  and  social  position  of  both 
are  a  part  of  the  so-called  labor  question  of  to-day.  To  the 
correct  solution  of  this  question,  the  lives  and  activities,  as 
well  as  the  thoughts,  of  honest,  earnest,  and  intelligent  men 
and  women,  in  all  quarters,  must  be  devoted.  Young  men 
and  women  who  have  not  yet  completed  their  prescribed 
courses  of  education  will  find  the  problem  large  enough  to 
absorb  much  of  their  best  life  effort. 

,      /  VII.   PROBLEMS   OF   POVERTY  AND  PARASITISM 

Suggestive     Accordiug  to  the  census  of  1890,  there  were,  in 
statistics.     ^^^^^  yg^^.^  .j^  ^jjg  United  States : 

Penitentiary  convicts 45,233 

Prisoners  in  county  jails 19,538 

Inmates  of  juvenile  reformatories 14,846 

Almshouse  paupers  73,045 

Total 152,662 

In  addition  to  these  classes,  who  are  being  supported  at 
public  expense  for  longer  and  shorter  periods,  there  is  the 
familiar  tramp;  and,  in  1894,  there  were  the  "Commonweal 
Armies,"  led  by  Coxey,  Eandall,  Browne,  Kelly,  and  others, 
which  numbered  in  all  about  10,000  men.  In  all  periods  of 
depression,  there  are  many  men  out  of  work  in  all  parts  of 
the  country,  who  often  suffer  great  destitution,  in  spite  of 
the  generous  aid  of  their  friends  who  have  employment, 
and  the  hregulai*  aid  of  the  benevolent  and  of  public 
authorities.  "During  the  depression  of  1882  to  1885,  it  is 
estimated  that  about  1,000,000  men  were  idle;   during  the 

'Harris,  Is  There  Work  Enough  for  All? 

^Addams,  A  Belated  Industry — "The  American  Journal  of  Soci- 
ology," March,  1896,  The  University  of  Chicago  Press. 


THE  FACTORY  PERIOD  OF  INDUSTRY      1G3 

recent  depression,  following  the  crisis  of  1893,  the  trade  union 
estimates  put  the  number  at  about  4,500,000;  more  con- 
servative estimates,  at  about  1,000,000.  Returns  made  to 
Bradstreet's,  the  results  of  which  were  published  December 
23,  1893,  show  that  in  119  cities,  801,055  men,  with  about 
1,956,110  persons  dependent  upon  them,  were  out  of  employ- 
ment." ^ 

In  England  and  Wales,  in  1895,  the  number  of  paupers, 
exclusive  of  vagrants  and  casual  poor,  in  receipt  of  official 
relief,  was  817,431  persons.  The  amount  of  relief  given  them 
was  9,866,605  pounds  sterling.^ 

"In  1881,  no  less  than  one  in  ten  of  the  total  recorded 
deaths  took  place  in  workhouses,  public  hospitals,  and  lunatic 
asylums.  In  London,  the  proportion  is  much  gi-eater.  In 
1888,  out  of  79,000  deaths  in  London,  10,170  took  place  in 
workhouses,  7,113  in  public  hospitals,  and  380  in  public 
asylums,  making  a  total  of  17,662,  or  more  than  one-fifth 
the  whole  number.  Since  comparatively  few  children  die  in 
these  institutions,  it  seems  probable  that,  in  the  richest  city 
in  the  world,  one  in  every  fojaj  adults  dies  dependent  upon 
public  charity."^ 
Efforts  to  Deal  The  abovc  bare  statements  of   fact  are  enough 

with  the  1       »  ii 

Problem.  to  show  that  the  problem  of  the  poor  and  of  the 
unemployed  has  grown  enormously  in  the  United  States  since 
colonial  da3's,  and  they  are  enough  to  show,  also,  that,  what- 
ever efforts  have  been  put  forth  in  Great  Britain,  during  the 
reign  of  Elizabeth  and  since,  the  English  problem  still  remains 
unsolved.  Poverty  notably  increased  during  the  latter  part 
of  the  eighteenth  century,  various  changes  in  the  poor-laws 
were  made,  and  the  gi'eatest  abuses  grew  up.  Chief  of  these 
was  a  system  of  allowances,  in  accordance  with  which  assist- 

'Warner,  Amci'iean  Charities,  A  Study  in  Philanthropy  and 
Economics— 18M,  T.  Y.  Crowell  &  Co.,  New  York. 

'^The  Statesman's  Ycar-Book,  p.  41. 

^Hobson,  Problems  of  Poverty,  p.  19  -  1891,  Methuen  &  Co., 
London 


164  OUTLINES  OF  INDUSTRIAL  HISTORY 

ance  was  given  to  families  in  proportion  to  the  number  of 
children.  Low  wages  were  often  given  by  employers,  pur- 
posely, in  order  that  the  deficiency  might  be  made  up  by  con- 
tributions from  the  poor-rates,  which  were  collected  from 
employers  and  non-employers  alike.  "The  farmers,  being 
the  chief  employers  of  labor,  welcomed  the  system,  for  they 
either  diminished  wages  to  the  minimum  allowance  of  the 
justices,  with  the  knowledge  that  it  Avould  be  made  up  to  their 
laborers  from  the  rates ;  or  they  dismissed  their  own  men  in 
favor  of  the  paupers,  who,  in  accordance  with  arrangements 
in  vogue  in  many  places,  the  parish  comj)elled  them  to 
employ,  or,  at  any  rate,  to  support.  And  thus,  Avhile  the 
honest  laborer  was  driven  out  of  work,  or,  at  best,  had  to 
accept  in  the  minimum  wage  a  less  sum  than  was  paid  to  the 
rate-aided  pauper,  marriages  were  recklessly  made,  the  pauper 
going,  as  it  has  been  said,  straight  from  the  church  to  the 
overseer,  and  every  encouragement  was  given,  not  only  to 
incontinence,  but  to  immorality  of  the  most  flagrant  kind."^ 
This  system  continued  from  1795  to  1834,  from  which  time 
until  the  present  numerous  reforms  have  been  introduced. 
Not  only  was  the  system  previous  to  1834  bad  in  the  par- 
ticulars suggested,  but  it  was  chaotic  in  administration. 
"The  rates  were  administered  by  2,000  justices,  15,000  sets  of 
overseers,  and  15,000  vestries,  acting  always  independently  of 
each  other,  and  very  commonly  in  opposition,  quite  uncon- 
trolled and  ignorant  of  the  very  rudiments  of  political 
economy."^ 

The  reforms  since  1834  have  been  directed  especially  toward 
the  removal  of  abuses  such  as  have  been  suggested,  and  toward 
an  organization  for  administration  that  should  combine  greater 
local  responsibility  with  greater  national  unity.  This  organi- 
zation consists  of  a  local  government  board,  the  chairman  of 
which  is  a  cabinet  officer,  648  poor-law  unions,  in  England 

'Medley,  pp.  370,  371 ;  compare  pp.  361-374. 

^Fowle,  The  Poor  Laiv,  pp.  73,  74,  also  pp.  89-92—1890,  The 
Macmillan  Co.,  New  York. 


THE  FACTORY  PERIOD   OF  INDUSTRY  165 

and  Wales,  each  including  one  or  more  parishes,  and  each 
having  an  elective  board  of  guardians,  and  overseers  for  each 
pai'ish. 

In  the  United  States,  the  unit  of  legislation,  for  the  pur- 
pose of  poor  relief,  is  the  State.  "In  each  commonwealth, 
the  fabric  of  the  public  charitable  institutions  rests  upon  the 
quicksands  of  the  poor-law,  which  few  study  and  probably 
none  nnderstand.  It  was  said  of  the  English  jjoor-law,  by  the 
commission  apj)ointed  to  investigate  its  workings,  that  there 
was  scarcely  one  statute  connected  with  the  administration  of 
poor-relief  which  had  produced  the  effect  designed  by  the 
legislature,  and  that  the  majority  of  them  had  created  new 
evils  and  aggravated  those  which  they  were  intended  to  pre- 
vent. The  same  is  substantially  true  in  many  of  our  own 
States,  and  especially  in  the  older  commonwealths,  such  as 
New  York  and  Pennsylvania,  where  the  legislatures  have  not 
been  careful  to  repeal  existing  legislation  when  enacting  new 
laws.  The  result  is  a  tangle  of  statutes,  Avhich  cannot  be 
rationally  interpreted,  because  they  have  no  rational  basis. 
The  courts  construe  them  from  time  to  time,  because  they 
must,  and  not  because  they  know  how.  The  fact  that,  after 
years  of  giving  outdoor  relief  in  Brooklyn,  the  whole  system 
was  decided  to  be  illegal,  shows  the  unsubstantial  nature  of  the 
foundation  upon  which  our  system  of  j)oor -relief  sometimes 
rests."  ^ 

Not  only  are  charities  chaotically  administered  under  State 
laws,  but  the  benevolent  work  of  churches  and  various 
voluntary  associations,  having  too  little  unity  of  action,  and 
the  indiscriminate  giving  of  individuals,  often  add  to  the 
tangle. 

The  chief  signs  of  future  improvement  in  this  branch  of 
social  administration,  as  discerned  by  Mr,  Warner,  arc  as 
follows :  ^ 

1.  The  burden  of  relief  is  so  heavy  that  "we  must  become 

'Warner,  p.  311. 
«Thesame,  pp.  394-407. 


106  OUTLINES  OF  INDUSTRIAL  HISTORY 

wiser  or  be  cruslied."     About  one  hundred  millions  of  dollars 
annually  are  needed  for  charity. 

2.  Large  numbers  of  the  influential  classes  are  recognizing 
the  fact  that  they  are  more  or  less  responsible  for  understand- 
ing all  the  social  conditions  and  institutions  which  cause 
existing  evils,  and  for  doing  all  in  their  power  to  apply 
remedies. 

3.  There  is  a  greater  tendency  to  use  scientific  methods  in 
charitable  work. 

4.  Xew  books  are  helping  to  clear  up  the  general  subject, 
and  the  most  progressive  colleges  and  universities  are  offering 
courses  in  "philanthropology." 

5.  The  administration  of  charities  is  becoming  a  profession. 

6.  Local  and  national  conferences  are  regularly  held 
"for  the  comparative  study  of  charities,  and  the  more 
extended  application  of  whatever  methods  have  been  found 
best." 

When  the  Avords  "dependent"  and  "j^arasite"  are  used, 
some  persons  think  only  of  the  worthy  and  unworthy  poor, 
but  others  think  also  of  another  class.  The  charge  of 
economic  parasitism  is  often  indiscriminately  apj^lied  to 
those  who  collect  rent  and  interest.  "In  that  section  of 
our  nation  which  speaks  of  itself  as  'society,'  being, 
indeed,  a  society  separated  by  economic  parasitism  from  the 
common  mass,  we  find  that  the  characteristic  activity  is 
the  provision  of  agreeable  and  exciting  methods  of  passing 
time."^  This  may  be  too  sweeping,  but,  in  view  of  the  fact 
of  its  partial  truth,  in  view  of  the  fact  of  the  boundless 
opportunities  for  social  study,  open  to  all,  and  in  view  of  the 
appalling  facts  of  human  need,  the  mere  reading  of  the  above 
quotation  may  well  suggest  to  each  young  man  and  3"0ung 
woman  the  question:  To  what  extent  am  I,  through  my 
personal  effort,  as  distinct  from  my  property,  producing 
utility  in  the  form  of  services  and  wealth,  in  return  for  the 
utilities  I  consume? 

^Fabian  Essays,  p.  107 — 1894,  Charles  E.  Brown  &  Co.,  Boston. 


THE  FACTORY  PERIOD   OF  INDUSTRY  167 


liandholdin^ 


VIII.  LANDLORDS 

After  the  Revolution,  the  Atlantic  States  ceded 
r^The'uViVted  their  territory  west  of  the  Alleghany  Mountains 

states  Under  -r^    ■       t    rt,     ,  i     ,^  •     •        i     i 

the  to  the  Lnited  States,  and  thus  was  originated 

the  public  domain.  By  purchase,  by  conquest, 
and  by  treaty,  the  public  lands  have  been  added  to,  from  the 
time  of  the  Louisiana  purchase  until  the  purchase  of  Alaska. 
"By  the  Ordinance  of  1787,  absolute  ownership  of  land  was 
guaranteed.  There  was  to  be  no  more  primogeniture  nor 
entail  on  the  jiublic  domain."  ^ 

"The  General  Land  Office,  charged  with  the  care  and 
custody  of  the  public  lands,  under  the  supervision  of  the  Secre- 
tary of  the  Interior,  is  one  of  the  most  important  and  respon- 
sible public  divisions  in  the  administrative  circles  of  the 
Government.  The  survey,  sale,  or  other  disposition  of  the 
nation's  public  lands,  is  within  its  control.  ...  Its  jurisdic- 
tion reaches  from  Lake  Erie  to  the  Pacific  Ocean,  and  from 
Canada  to  the  Gulf  of  Mexico.  Four-fifths  of  the  lands  of  the 
entire  area  of  the  United  States  have  been,  or  are  now,  under 
its  supervision."^  By  sale  at  prices  from  $1.25  to  $2.50  per 
acre,  by  homestead  and  tree  claims,  and  by  bounties  to  soldiers 
and  sailors,  vast  areas  of  this  public  land  have  come  into  the 
possession  of  resident  owners.  Railroads,  other  corporations, 
and  schools  and  colleges  have  also  secured  enormous  areas. 
Fraud  and  failure  to  fulfill  contracts  have  been  frequent  both 
on  the  part  of  private  persons  and  corporations.  Exclusive  of 
Indian,  timber,  and  military  reservations,  about  000,000,000 
acres  of  public  land  remained  in  1896.  Most  of  this  is  too 
dry,  too  rugged,  too  swampy,  or  in  some  other  Avay  unfit  at 
present,  for  agricultural  purposes.  Most  of  the  lands  of 
Alaska,  also,  yet  remain  under  Government  control. 

The  extent  to  which  private  persons  own  land  in  the  L^nited 
States  is  partially  suggested  by  the  following  statements  of 
fact  based  on  the  census  of  1890 : 

'Sato,  pp.  17,  18. 

'■'The  same,  p.  137.     Compare  Donaldson,  pp.  1232,  1223. 


168  OUTLINES  OF  INDUSTRIAL  HISTORY 


M£  ^ 


Families  occupying  encumbered  farms  of  their  own 886,957 

Families  occupying  unencumbered  farms  of  their  own...     2,255,789 

Total  families  occupying  their  own  farms 3,142,746 

Families  occupying  hired  farms 1,624,433 

Total  families  occupying  farms 4,767,179 

The  percentage  of  farm  homes  and  other  homes  owned  and 
rented  in  1890  were  as  follows:^ 

, —  Percentages  — n 
Owned.       Rented, 

Homes  in  cities  above  100,000 22.83  77.17 

Homes  in  cities  from  8,000  to  100,000 35.96  64.04 

Homes  outside  such  cities  (but  not  farms) 43.78  56.22 

Farms 65.92  34.08 

Average  47.80  52.20 

So  far  as  economic  independence  is  secured  by  ownershij)  of 
land,  therefore,  this  is  least  common  in  the  largest  cities  and 
most  common  upon  the  farms.  It  should  also  be  pointed  out 
that  the  land  ownership  in  cities  here  described  does  not  give 
the  owners  much  opportunity  for  productive  effort  at  home, 
in  comparison  with  the  ownership  of  farms.  The  tendency  of 
population  toward  the  cities  in  the  United  States,  therefore, 
means  at  least  this — an  increasing  dependency  of  the  popula- 
tion as  a  whole  upon  others  than  themselves  for  access  to  the 
land,  both  for  the  purpose  of  having  a  spot  on  which  to  dwell, 
and  for  opportunity  to  take  part  in  production.  The  time 
has  long  since  gone  past,  in  the  United  States,  as  well  as  in 
England,  when  the  majority  of  men_enjoy  private  ownership 
of  land  even  for  a  home. 

Facts  have  already  been  given  to  show  that  both 

Landholding  .  -,      ■,       ^     ,  i  ^ 

in  Kngiaad    the  proportionate  and  absolute  numbers  of  per- 

Periodofthe  SOUS  engaged  in    agriculture  in  Great  Britain 

'  have  known  periods  of  decline  within  the  last 

century.     It  has  also  been  stated  that  the  small  freeholders 

and  tenants  of  various  kinds  were  greatly  reduced  in  number. 

1  Spahr,  p.  53. 


THE  FACTORY  PERIOD  OF  INDUSTRY  169 

This  decrease  seems  to  have  been  going  on,  vnth  greater  or  less 
rapidity,  ever  since  the  enclosures  which  followed  the  Black 
Death  began.  Since  1688,  and  especially  since  the  close  of 
the  eighteenth  century  and  during  the  first  of  the  nineteenth, 
the  process  went  on  even  faster.  During  this  period,  rich  mer- 
chants and  manufacturers  bought  up  the  lauds  of  small  farm- 
ers, who  were  forced  to  sell  because  of  enclosure,  since  they 
could  not  afford  the  outlay  necessary  to  farm  by  the  improved 
methods  that  were  lieiug  adopted,  and  for  other  reasons  that 
can  not  here  be  explained.  The  excessiv e  poor-rates  at  the 
begiiming  of  the  nineteenth  century,  which,  we  have  seen, 
bore  more  heavily  upon  the  small  farmer,  who  employed  little 
labor,  than  upon  the  large  farmer,  who  employed  much,  also 
taxed  many  small  farmers  out  of  existence  as  farmers,  and 
transformed  them  into  dependent  wage-earners.  "The  finish- 
ing stroke  to  a  rapidly  decaying  class  was  given  by  the  fall  in 
prices  after  the  great  Continental  War  (1815),  following  on 
the  inflation  of  previous  years ;  and  as  their  small  properties 
came  into  the  market,  and  no  holders  of  their  own  class 
appeared  to  take  their  place,  their  lauds  went  to  swell  the  largo 
farms  that  were  now  the  typical  feature  of  British  agriculture. 
Here  and  there,  an  occasional  representative  of  a  once  large 
and  worthy  body  of  men  still  remains  (1895),  but  the  English 
yeoman  of  the  days  of  Henry  X.  (1413-1422),  and  Queen 
Elizabeth  (1558-1603),  as  a  class,  has  disappeared  entirely."^ 
"In  18tG,  the  number  of  owners  of  less  than  an  acre  of  land 
in  the  United  Kingdom  (Great  Britain  and  Ireland),  exclusive 
of  the  metropolis,  was  officially  returned  at  852,408;  of  own- 
ers of  more  than  an  acre,  at  321,38(5;  total  numl^er  of  owners, 
1,173,794."-  As  the  total  population  of  the  United  King- 
dom, exclusive  of  London,  was  at  the  same  time,  in  round 
numbers,  28,000,000,  the  ratio  of  owners  to  the  total  pojiula- 
tion  outside  of  London  Avas  about  1  to  24,  and  ratio  of 
owners  of  more  than  an  acre  of  land  to  the  total  population 

'Gibbins,  p.  279.     Compare  pp.  276-283. 
'^llie  Statesman's  Year-Book,  1897,  p.  66. 


170  OUTLINES  OF  INDUSTRIAL  HISTORY 

was  about  1  to  87.  To  pnt  these  facts  in  another  way,  the 
total  area  of  the  United  Kingdom  is  120,677  square  miles, 
77,233,280  acres.  Subtracting  from  this  acreage  5,500,000 
acres  of  waste  and  common  land,  the  area  of  London,  and  the 
acreage  of  those  owning  less  than  one  acre  each,  there  is  left 
over  70,000,000  acres  owned  by  321,386  persons,  217  acres 
each.  Total  population  in  the  United  Kingdom,  outside  of 
London,  in  1876  was  28,000,000  (an  estimate  too  low  rather 
than  too  high) . 

I        I    Owners  of  less  than  1  acre  each 852,408 

-        /    Owners  of  an  average  of  217  acres  each 321,386 

/  Total  number  of  owners  of  land 1,173,794 

Total  number  not  owning  land 26,826,206 

These  figures  suggest  something  of  the  dependence  in  recent 
years  of  the  great  majority  of  the  population  in  Great  Britain 
and  Ireland  upon  a  few  land  owners,  both  for  a  dwelling  place 
and  for  an  opportunity  to  carry  on  any  kind  of  production. 
It  is  only  fair  to  state  in  tliis  connection,  however,  that,  while 
individual  ownership  of  land  is  rare,  the  problem  of  securing 
admission  to  the  land  for  larger  numbers  of  people  is  attract- 
ing the  attention  of  statesmen  and  of  many  social  students. 
As  a  result  of  efforts  already  made,  cooperation  in  farming  is 
being  tried,  and  an  increasing  number  of  persons  is  securing 
the  rental  of  small  allotments  of  land.  In  1885,  the  number 
of  holdings  in  Great  Britain  of  less  than  50  acres  was  392,203. 
"A  Report  of  the  Board  of  Agriculture  for  1800  shows  that 
this  number  had  risen  in  1889  to  409,422,  and  that,  at  th-e 
same  time,  there  were  455,005  ordinary  detached  allotments 
under  an  acre,  in  addition  to  262,614  cottage  gardens  of  an 
eighth  of  an  acre  and  upwards;  and  these,  together  with 
'potato-grounds,'  and  cow  runs,  bring  up  the  total  number  of 
instances  oi  petite  culture  in  Great  Britain  to  1,300,746."^ 
It  is  complained  that  the  rent  of  these  allotments  is  too  high. 

'Marshall,  Principles  of  Economics,  vol.  I,   p.  699— 2d.  ed.,  1893, 
The  Macmillan  Co.,  New  York. 


THE  FACTORY  PERIOD  OF  INDUSTRY  171 

Taken  altogether,  the  facts  given  show  at  least  this  much, 
tliat  in  modern  England,  nnlike  the  custom  in  old  feudal 
da3's,  there  is  no  general  customary  access  to  portions  of  Eng- 
lish soil  for  the  great  mass  of  Englishmen,  either  as  partial 
owners  or  as  tenants.  A  would-be  owner  or  tenant  must 
now  enter  the  lists  with  all  others  like  himself,  and,  on  the 
basis  of  a  new  contract,  bargain  with  the  present  owner  for 
what  he  wants.  If  the  conditions  of  the  bargain  are  such 
that  he  can  fulfill  them,  he  secures  access  to  the  soil;  if  not, 
he  must  remain  a  landless  man.  -; 

IX.   MODEEX  CAPITALISM  '^^^       ku-^X^      ^'X^jK 

Mr.  Hobson^  points  out  that  five  things  should 
^"Labo^^and**  be  Considered  in  a  study  of  the  cooperation  of 

BusiLeVs?      capital   and  labor    in  a   transforming  process :    .  ^      , 
"(1)   The  ownership  of  the  material;    (2)  ther'''  <-^  c 
ownership  of  the  tools;    (3)  the  ownership  of  the  productive!  /^ 
power;    (4)  the  relations    subsisting  between  the  individual \ 
units  of    labor;    (5)    the  work-place."      Under   the  Family  \ 
System,  the  materials  and  tools  were  owned  by  the  head  of  j 
each  family ;   the  productive  power  was  the  physical  strength 
of  the  man  and  his  family;  their  relations  to  each  other  were 
those  of  blood ;  and  the  work-place  was  their  own  house. 

Under  the  Gild  System,  the  material  was  sometimes  owned 
by  the  master  workman,  and  sometimes  by  the  consumer;  the 
tools  usually  belonged  to  the  workmen;  the  workmen  still 
furnished  their  own  productive  power ;  the  relations  between 
the  workers  were  those  of  ajiprentice,  journeyman,  and 
master  workman,  who  were  usually  neighbors  and  socially  one 
about  as  good  as  another;  and  the  work-place  was  the  labor- 
er's home,  the  home  of  the  master  workman,  or  the  home  of 
the  consumer  who  was  having  the  work  done. 

Under  the  Domestic  System,  the  tools  usually  belonged  to 
the  workman,  but  sometimes  to  the  master  workman,  or 
to  their  common  employer;  the  material  wiis  owned  by  the 

T/ie  Evolution  of  Modern  Capitalism,  p.  35. 


172  OUTLINES  OF  INDUSTRIAL  HISTORY 

capitalistic  employer;  the  motive  power  was  still  largely 
that  of  the  workers;  the  relations  between  workers  were 
still  chiefly  those  of  social  equals,  although  the  employer 
might  be  far  removed  from  the  workers,  and  the  workers  who 
performed  one  partial  process  might  be  unknown  to  those  who 
performed  another  partial  process;  the  work-place  was  most 
commonly  the  home  of  the  workers,  or  the  home  or  small  shop 
of  the  master  workman. 

Under  the  Factory  System,  materials,  tools,  productive 
power,  and  work-place  have  passed  completely  out  from  the 
ownership  and  control  of  the  Avage -workers.  The  relations 
subsisting  between  the  individual  units  of  ordinary  labor  are 
too  much  those  of  different  parts  of  a  great  productive  mechan- 
ism, brought  together  from  whatever  homes  they  occujiy,  to 
go  through,  day  after  day,  the  same  more  or  less  automatic  mo- 
tions. As  for  the  interest  of  those  who  own  the  land  required 
for  the  manufactory,  of  those  who  furnish  the  expensive  plant 
in  buildings  and  machinery,  of  those  whose  genius  fuses  all  into 
a  product  desired  by  consumers, — the  interest  of  all  these  in  the 
human  beings  who  form  a  part  of  the  productive  mechanism 
has  a  decided  tendency  to  become  the  same  as  tlieir  interest  in 
the  rest  of  the  establishment — simply  tliat  interest  which 
[leads  them  to  try  to  get  out  of  their  investment  the  largest 
possible  returns.  That  this  tendency  does  not  always  work 
itself  out  to  the  naked  conclusion  suggested  is  no  fault  of  the 
system  itself. 

The  phrase,  "Factory  System  of  industry,"  is 

tractive,  Trans-  primarily  applicable  to  manufacture,  but  lum- 

Transferriiig    bcriug,    mining,    extensive   agriculture    in    its 

highest  development,  transportation,  and  trade, 
present  nearly  the  same  characteristics,  in  regard  to  tlie  five 
points  previously  mentioned,  at  the  present  time  as  do  the 
manufactures.  With  respect  to  capital,  agriculture,  as  on  the 
great  wheat  farms  of  Dakota,  lumbering,  as  in  ]\Iichigan  and 
Oregon,  and  mining  for  coal,  iron,  coiDper,  gold,  and  silver, 
require  a  gi-eat  outlay  for  valuable  land,  forests,  and  mines, 


THE  FACTORY  PERIOD  OF  INDUSTRY  173 

for  farming  machinery,  sawmills,  and  machinery  for  sinking 
shafts,  raising  coal  and  ore,  and  reducing  the  same;  transpor- 
tation companies  require  an  enormous  outlay  for  right  of 
way  and  roadbed,  for  locomotives,  cars,  machine  shops,  offices, 
freight  houses,  stations,  steamboats,  elevators,  wharfs,  etc. ; 
and  the  great  transferring  comj)anies  must  have  expensive 
sites  in  the  very  centers  of  human  activity,  immense  buildings, 
fortunes  in  stocks  of  goods,  and  a  whole  sulisidiaxy  trans- 
portation equipment  in  the  form  of  truck  wagons,  special  cars, 
delivery  wagons,  etc. 

There  is  also  connected  with  each  of  these  gi'eat  businesses, 
as  a  rule,  a  large  number  of  persons  who  work  away  from  their 
homes,  have  no  property  right  in  the  plant,  material,  or 
product,  and  whose  relations  to  their  employers  are  largely 
impersonal,  unsocial,  and  subject  only  to  the  conditions  of  the 
contract,  which  calls  for  a  certain  periodic  cash  payment  on  one 
side,  and  a  certain  number  of  daily  hours  of  toil  upon  the  other. 

In  the  great  businesses  of  each  of  the  typical  economic 
groups,  there  is  also  a  high  degree  of  specialization  or  division 
of  occupation,  so  that  the  productive  process  as  a  whole  is 
divided  into  a  gi'eat  number  of  separate  processes,  each  of 
which  is  continuously  performed  by  the  same  person  or  group 
of  persons. 

[Note. — The  extent  to  which  single  immense  businesses  are 
now  coming  to  unite  under  one  management  all  the  con- 
secutive processes  of  production — extractive,  transforming, 
transporting,  and  transferring — is  an  interesting  subject  for 
investigation;  for  example,  department  stores,  that  do  their 
own  manufacturing;  steel  companies,  that  have  their  own 
iron  mines;  steamboats,  railroads,  and  newspapers,  that  own 
forests,  pulp  and  paper  mills,  transportation  facilities,  etc. 
See  "The  Outlook"  for  July  31,  1899.] 

Finally,  each  great  business  requires  the  generalship  of 
some  on^^persoB.  with  great  execi^iv^ojibiljty^  keep  all  the 
complicated  details  in  harmonious  adjustment  to  each  other, 
and  the  products  of  the  enterprise,  as  a  whole,  so  adjusted  to 


174  OUTLINES  OF  INDUSTRIAL  HISTORY 

the  future  wants  of  consumers,  that  the  net  result  shall  be 
a  gain  instead  of  a  loss. 

.    ,  ,        In  spite  of  the  enormous  importance  of  capital 

Survivals  from  ^  ^ 

Other  Periods   to  the  various  typical  businesses  of  the  Factory 

of  Industry  to  -^  '■  •' 

the  I'reseiit    Penocl,  the  eyes  must  not  be  closed  to  the  fact 

Time,  "^ 

that  survivals  from  all  the  other  periods  of 
industry  are  still  common.  Perhaps  the  most  notable  among 
these  are  the  various  home  manufactures  of  articles  of  clothing 
and  rude  tools  for  home  use  among  farmers  who  live  in  remote 
places;  the  work  of  cobblers,  plumbers,  and  custom  tailors, 
whose  industry  has  many  points  of  similarity  to  industry  under 
the  Gild  System;  and,  most  notable  of  all,  the  industries 
carried  on  in  accordance  with  what  is  now  called  the  Sweating 
System,  which  is  simply  a  perverted  form  of  the  old  Domestic 
System. 
Partnership,    The  necessity  for  a  larger  investment  than  most 

Corporations,  •     j-    •  i       n  i         i  ■.     t 

Cooperations,  pcrsous  individually  can  make  has  led  men 
to  combine  their  capital  for  large  enterprises. 
The  trading  companies  of  various  kinds  which  v/ere  formed 
long  ago  in  England  are  illustrations  of  these  combinations  of 
capital.  In  this  century,  the  growing  importance  of  capital 
in  production  has  led  to  the  formation  of  more  combinations 
of  various  kinds  than  the  world  ever  before  has  seen.  They 
exist  now  in  nearly  every  community,  and  challenge  the 
attention  of  all  intelligent  persons.  They  affect  all  classes, 
and  are  in  process  of  such  rapid  development  that  anything 
that  might  be  said  of  their  extent  to-day  is  likely  to  be  far 
short  of  the  truth  to-morrow. 

Two  things  are  evident:  first,  we  shall  never  go  wholly 
back  to  earlier  and  more  wasteful  methods  of  production; 
general  welfare  lies  not  in  trying  to  stop  industrial  consolida- 
tion and  combination  altogether.  Second,  it  should  be  equally 
clear  that  all  of  us  are  stronger  and  of  more  importance  tlian 
any  of  us — that  mankind  is  more  than  a  man  or  a  few  men,  and, 
therefore,  that  the  advantages  of  combination  must  not  be 
wholly  reserved  to  a  single  man  or  to  a  few  men.    Ways  must  be 


THE  FACTORY  PERIOD   OF  INDUSTRY  175 

found  to  socialize  the  spirit  of  corporate  enterprises,  and  to 
distribute  their  benefits  justly  among  all  concerned.  In  the 
language  of  the  formula  of  production  worked  out  in  Part  I: 
Society  +  man  +  capital  -{-  land  =  utility;  it  must  be  in 
subordination  to  the  will  of  society  that  the  individual  man 
or  corporation  uses  implements  upon  land  to  satisfy  want. 
The  part  cannot  be  greater  than  the  whole. 

The  It  is  hardly  necessary  to  state,  more  definitely 
erta  er.  ^^g^^  already  has  been  stated  that  the  impor- 
tance of  the  industrial  manager  to  modern  production  has 
grown  with  the  growth  of  the  importance  of  capital.  The 
business  of  a  modern  hotel,  of  a  department  store,  of  a  steel 
manufactory,  of  a  cotton  factory,  of  a  transcontinental  rail- 
road, of  a  metropolitan  bank,  requires  such  soundness  of  judg- 
ment, foresight,  knowledge  of  human  nature,  ability  to  classify 
and  dominate  details,  and  rapidity  and  boldness  of  action,  as 
have  belonged  of  old  to  great  military  commanders ;  accordingly 
these  men  are  sometimes  aptly  called  captains  of  industry. 

The  term  also  serves  to  remind  us  of  the  competitive  nature 
of  modern  industry,  which  often  and  often  has  allowed  a 
conquering  captain  to  drag  an  unsuccessful  antagonist — no 
longer  a  captain,  but  a  dependent  wage-earner — after  the 
chariot  of  his  own  economic  triumph. 

In  proportion  as  the  size,  complexity,  international  char- 
acter, and  uncertainty  of  business  have  increased,  since  the 
early  days  of  manufacture  of  wool  for  foreign  markets, 
under  the  Domestic  System,  until  the  present  day,  the  oppor- 
tunities of  economic  conquests  opening  to  the  Napoleonic  cap- 
tains of  industry  have  grown  greater,  and  the  necessary  corps 
of  subordinate  commanders  has  increased. 
/ 

X.    WAOE-EAliXERS  UNDER  THE  FACTOIiY  SYSTEM 

So  far  as  materials,  tools,  motive  power,  and 
wage-^earnerH.  work-placB  havB  become  expensive  has  it  been  in- 
creasingly difficult  for  the  ordinary  man  to  furnish 
thorn,  and  thereby  set  up  in  business  for  himself.     The  small 


176  OUTLINES  OF  INDUSTRIAL  HISTORY 

farms  in  England  gave  way  to  larger  ones,  and  the  former 
owners  became  agricultural  laboi'ers ;  as  land  becomes  expensive 
in  the  United  States,  the  same  process  is  going  on;  the  small 
manufacturer,  carrier,  and  trader  have  everywhere  given  Avay 
before  larger  competitors,  and  are  now  either  wage-earners  or 
independent  workers  in  subordinate  and  out-of-the-way  corners 
of  the  various  great  fields  of  production.  The  majority  of  the 
producers  of  material  wealth  in  England  to-day  are  wage- 
earners,  with  hardly  any  possibility  of  being  able  to  set  up  in 
business  for  themselves  as  individuals.  To  a  less  degree,  a 
similar  state  of  things  has  come  to  exist  in  the  United  States. 

I  With  the  exception  of  the  cultivation  of  the  soil,  it  seems  not 
too  much  to  say  that  only  the  odds  and  ends  of  modern 
material  production  remain  in  the  hands  of  independent  pro- 
ducers who  i^ossess  small  capital. 

Freedom  to  Legally,  the  wage-earner  was  never  so  free  to  go 
wherever  he  chose  as  he  has  been  during  the 
latter  half  of  the  period  of  the  Factory  System.  In  the  Ameri- 
can colonies,  during  the  preceding  period,  the  complex  jurisdic- 
tion of  many  colonial  authorities,  added  to  the  English  control 
in  America,  resulted  in  many  practical  restrictions  upon  the 
freedom  of  movement  of  wage-earners.  The  slavery  system  and 
the  system  of  indentured  servants  also  produced  similar  effects. 

In  England,  during  feudal  days,  tbe  servile  population  was 
not  free  to  leave  the  manor  on  Avhich  it  was  born.  When 
these  feudal  bonds  become  too  weak  to  hold,  the  Statutes  of 
Laborers  of  the  fourteenth  century  substituted  restraining 
legislation  to  accomplish  the  same  purpose.  The  gild  regula- 
tions of  medieval  towns  also  tended  in  the  same  direction. 
The  Elizabethan  Statutes  of  Apprentices  and  Poor  Laws,  and 
the  Law  of  Settlement  of  Charles  II.  (1660-1685)  more  effec- 
tually restrained  wage- workers  from  free  migration.  Although 
nominally  repealed  before,  these  laws  continued  to  be  of  great 
practical  effect  until  the  Poor  Laws  were  changed  in  1834. 

Although  at  last  free  in  theory  to  go  wheresoever  he  will, 
the  wage-worker  of  to-day  is  often  ignorant  of  places  where 


THE  FACTORY  PERIOD  OF  INDUSTRY  177 

help  is  wanted,  lias  little  or  no  money  to  go  when  he  knows 
of  work  in  a  distant  place,  is  bound  to  one  locality  by  ties  of 
family,  religion,  and  occupation,  yet  frequently  is  turned  out 
of  his  job  by  improvements  in  machinery  and  violent  fluctua- 
tions in  the  demands  for  such  services   as   he   can  render. 
Only  a  man  who  is  possessed  of  great  economic  adaptability* 
m. ay  now  feel  at  all  sure  of  uniting  with  his  new  freedom  of 
migration  a  reasonable  certainty  of  continuous  emjiloyment. 
Homes  of      The  primary  fact  respecting  the  homes  of  work- 
ers in  the  nineteenth  century   has  been  men- 
tioned incidentally  in  connection  with  the  paragraphs  on  con- 
centration of  labor  in  modern  factories,  and  the  tendency  of 
population  toAvard   cities   and   towns.     Especially   in  manu- 
facture, transportation,  and  trade,  workers  in  large  numbers 
have  been  obliged  to  find  homes  within  small  areas,  in  order 
that  the  distances  between  their  homes  and  places  of  work  might 
not  be  too  great.     From   this  fundamental  fact  have  come 
the  overcrowding,  and  the  location  of  homes  in  unsanitary 
places,  within  sight  and  sound  and  smell  of  all  kinds  of  proc- 
esses and  factories.     The  great  mass  of  modern  wage-workers 
have  become  life-long  exiles  from  the  sunshine  and  fresh  air 
of  country  life.     At  their  worst,  the  homes  of  wage-workers 
have,  therefore,  often  more  than  justified  the  unspeakable 
accounts  of  tenement  house  life,  familiar  to  us  all.     At  their 
best,  they  have  enjoyed  the  benefits  of  the  most  perfect  sani- 
tary science  of  the  day,  have  allowed  their  occupants  higher 
social,   educational,    and    esthetic    privileges     than    can     be 
enjoyed  by  families  in  country  isolation,  and  have  demon- 
strated  the   possibility  of  bringing  into  crowded   city  areas 
something  of  the  health  and  inspiration  of  country  sunshine 
and  vegetation.^ 

Kelley,  The  Working  Boy  — ''The  American  Journal  of  Soci- 
oloj^'y,"  November,  IBOfi. 

2.S<^ie  Re])t)rt  of  Department  of  Labor,  No.  8. 

4''or  comijarison  of  Domestic  System  with  Factory  System  see 
Wright,  The  Factory  System,  Tenth  Census  of  the  United  States, 
vol.  II. 


11^  OUTLINES  OF  INDUSTRIAL  HISTORY 

The  bicycle  and  trolley  car  are  also  recent  factors  of  great 
significance  in  this  question  of  the  location  of  homes  of  mod- 
ern wage-earners  at  a  distance  from  their  working  place. 

During  the  first  years  after  the  general  intro- 
Conditions  of  duction   of   the   Factory   System   in   England, 

Labor.  .  to  5 

there  was  a  period  of  low  wages  and  iuuci  condi- 
tions of  labor  which  it  is  appalling  to  read  about  even  now. 
"The  tale  of  their  sufferings  may  be  studied  in  the  Blue-books 
and  Eeports  of  the  various  Commissions  which  investigated  the 
state  of  industrial  life  in  the  factories,  mines,  and  v/orkshops 
between  1833  and  1842 ;  or  it  may  be  read  in  the  burning  pages 
of  Engel's  State  of  the  Working  Classes  in  England,  in  1844, 
which  is  little  more  than  a  sympathetic  resume  of  the  facts  set 
forth  in  official  documents.  We  hear  of  children  and  young 
peojDle  in  factories  overworked  and  beaten  as  if  they  were 
slaves ;  of  diseases  and  distortions  only  found  in  manufactur- 
ing districts;  of  filthy,  wretched  homes,  where  people  huddled 
together  like  wild  beasts ;  vf e  hear  of  girls  and  women  vf ork- 
ing  underground,  in  the  dark  recesses  of  the  coal  mines, 
dragging  loads  of  coal  in  cars  where  no  horses  could  go,  and 
harnessed  and  crawling  along  the  subterranean  pathways  like 
beasts  of  burden.  Everywhere  we  find  cruelty  and  oppres- 
sion, and  in  many  cases  the  workmen  were  but  slaves,  bound 
to  fulfill  their  master's  commands,  under  fear  of  dismissal  and 
starvation.  Freedom  they  had  in  name;  freedom  to  starve 
and  die;  but  not  freedom  to  speak,  still  less  to  act,  as  citizens 
of  a  free  state.  They  were  often  even  obliged  to  buy  their 
food  at  exorbitant  prices  out  of  their  scanty  wages  at  a  shop 
kept  by  their  employer,  where  it  is  needless  to  say  they 
paid  the  highest  possible  price  for  the  worst  possible  goods. 
This  Avas  rendered  j)ossible  by  the  system  of  paying  workmen 
in  tickets  or  orders  upon  certain  shops,  which  were  under  the 
suj)er vision  of  their  employers.  It  was  called  the  'truck 
system';  and  was  at  length  condemned  by  the  law  (1887), 
after  many  futile  attempts  had  been  made  to  suppress  it."  ^ 
iGibbins,  pp.  433,  433. 


THE  FACTORY  PERIOD  OF  INDUSTRY  179 

In  the  decade  between  1830  and  1840,  similar  but  less 
deplorable  conditions  became  common  in  the  manufacturing 
centers  of  the  United  States,  especially  in  New  England.^ 
The  hours  and  conditions  of  labor,  therefore,  became  subjects 
of  legislation  in  both  England  and  the  United  States,  but  the 
question  as  to  the  amount  of  wages  has  been  in  the  main 
untouched  by  legislation  in  this  country. 

Parliament  declined  to  interfere  with  wages  in  1813, 
by  its  repeal  of  the  statutes  which  had  hitherto  provided 
for  the  regulation  of  wages  by  justices  of  the  peace.  Since 
that  date,  wages  have  been  legally  adjusted  by  a  con- 
tract between  the  employer  and  the  employed.  In  the 
United  States,  since  the  Revolution,  the  amount  of  wage 
has  been  considered  to  be  a  matter  for  contract  and  not  for 
legislation.^ 

The  struggle  between  employers  and  employed  over  the 
question  of  wages  and  conditions  of  labor  has  been  continued, 
and  has  gone  now  in  favor  of  one  side  and  now  in  favor  of 
the  other,  as  conditions  have  changed.  On  the  whole,  wage- 
earners,  both  in  England  and  the  United  States,  have  been 
gaining  an  increasing  wage  during  the  last  fifty  years.  Still, 
production  has  more  than  kept  pace  with  this  rise  in  wages, 
80  that  wage-earners  get  a  decreasing  fraction  of  the  total 
value  of  the  net  product.^ 

Again,  statistics  of  the  average  rate  of  wages  received  often 
give  an  exaggerated  impression  of  the  actual  wages,  because 
they  do  not  take  sufficient  account  of  the  periods  of  non- 
employment,  which  are  frequent.  A  wage  that  would  be 
entirely  satisfactory  if  received  for  every  working  day  through- 
out the  year,  often  becomes  painfully  inadequate  because  of 
periods  of  enforced  idleness.    "It  is  a  prosperous  year,  indeed? 

'^lacLean,  Factory  Legislation  for  Women  in  the  United  States, 
— "The  American  Journal  of  Sociology,"  September,  1897,  pp.  185, 
IHd. 

'Stimson,  p.  17. 

'Wright,  Industrial  Evolution  of  the  United  States,  pp.  191,  193. 


180  OUTLINES  OF  INDUSTRIAL  HISTORY 

when   the   average  wage-receiver    aggi'egates    forty-four    full 
weeks  employment."  ^ 

As    to   the    improvement   in     conditions    and 
Factory       hours   of    labor,   especially  in   factories,  much 

Legislation.  in^-ni  l  t       ^         -tt     •         i 

has  been  done,  both  m  Jingland  and  the  United 
States,  partly  through.,  the  direct  efforts  of  those  who  are 
employed,  but  far  more'through  legislation.  In  England,  this 
legislation  has  been  going  on  ever  since  1802,  and  relates 
especially  to  such  conditions  as  the  following :  ^ 

1.  The  minimum  age  for  children  who  can  be  employed  in 
factories. 

2.  Limitation  of  the  working  day  for  children  and  women. 

3.  Prohibition  of  night  work  to  children. 

4.  Compulsory  education  of  children. 

5.  Sanitary  conditions  of  factories  and  other  places  of  work. 

6.  The  protection  of  employees  against  accident,  by  requir- 
ing gi'eater  precautions  in  factories,  mines,  etc. 

7.  The  limitation  of  the  hours  of  work  for  men. 

8.  Employers'  liability  for  losses  due  to  death  and  other 
accidents  of  laborers  while  at  work. 

The  Acts  of  Parliament  of  a  similar  tenor  to  that  of  the 
legislation  just  mentioned  have  been  mainly  in  the  interests  of 
wage- workers.  In  the  aggregate,  they  have  been  very  numer- 
ous, and  cover  nearly  the  whole  period  from  1802  until 
the  present  time.  Taken  together,  they  form  a  great  body  of 
statutes  known  as  the  English  Factory  Laws. 
j^  In  the  United  States,  sim.ilar  legislation  began  as  early  as 
'  1842  in  Massachusetts,  by  limiting  the  hours  of  work  for  chil- 
dren under  twelve  to  ten  hours  per  day.  Since  that  time, 
factory  legislation  has  made  some  progress  in  the  various 
states,  though  by  no  means  so  much  as  in  England.  Each 
state  here  is  a  law  unto  itself,  and  uniformity  floes  not  exist. 
The  following  table  must  serve  as  a  suggestion  of  what  has 
been  accomplished  already,  and  also  of  what  remains  to  be  done : 

'Spahr,  p.  101. 

"Hobson,  The  Evolution  of  Modern  Capitalism,  pp.  321-323. 


THE  FACTORY  PERIOD  OF  INDUSTRY  181 

"States  having  inspection  laws 12 

States  having  women  inspectors 6 

States  regulating  hours  of  labor 32 

States  having  sanitary  laws 12 

States  providing  seats  for  women  employees 22 

Note. — Only  seven  regulate  hours  of  women  over  18  years,  and 
only  five  of  these,  hoiu's  of  women  over  21  years."  * 

Various    laws    aojainst  combinations    of    wage- 

The  Efforts  of  °  .  ,  .    f 

Wage-Earners  earners    foF    the    purpose   of    securing  higher 

at  CombiDation.  ...  ,  , 

wages  and  better  conditions  of  work,  were 
passed  in  England  from  the  time  of  Edward  VI.  (1547-1553), 
but  these  were  all  summed  up  in  the  famous  Combination 
Laws  of  George  III.,  in  1800.  These  "strictly  forbade  all 
combinations,  unions,  or  associations  of  workmen  for  the  pur- 
pose of  obtaining  an  advance  in  wages  or  lessening  the  hours 
of  work."^ 

In  182-4  these  laws  were  repealed,  although  the  very  next 
year  Parliament  declared  illegal  any  action  that  might  result 
from  combinations  of  workers.  From  1838  to  1848,  the 
Chartist  movement  grew  strong,  and  the  wage-workers 
demanded  a  Charter,  by  which  vote  by  ballot,  abolition  of 
property  qualification  for  voters,  the  payment  of  members  of 
Parliament,  and  universal  suffrage,  should  be  guaranteed. 
When  this  movement  partially  died  out,  trade  unions  were 
more  rapidly  formed,  and  in  1871  legalized  by  Act  of  Parlia- 
ment. In  England,  therefore,  the  full  right  to  combine  in 
their  own  interests  has  been  freely  enjoyed  by  workers  only 
about  a  quarter  of  a  century. 

The  number  of  wage-workers  in  England  who  were  mem- 
bers of  trade  unions  in  1892  is  put  by  Mr.  Sidney  Webb'  at  from 
1,500,000  to  1,600,000.  Although  this  is  only  about  four  per 
cent  of  the  total  population,  it  would  be  a  much  higher  per 
cent  of  the  adult  working  males.     In  some  counties,  we  are 

•MacLean,  p.  203. 

'Gihbins,  pp.  41G-421. 

^Thc  History  of  Trade-Unionism,  p.  409. 


182  OUTLINES  OF   INDUSTRIAL  HISTORY 

told,  over  one-half  the  total  number  of  working  men  are 
members  of  unions.  "The  Trade-union  world  is,  therefore, 
in  the  main,  composed  of  skilled  craftsmen  in  densely  popu- 
lated districts,  where  industry  is  conducted  on  a  large  scale. 
About  750,000  of  its  members — one-half  of  the  v/hole — belong 
to  the  three  staple  trades  of  coal  mining,  cotton  manufacture, 
and  engineering,  whilst  the  laborers  and  the  women  workers 
remain,  on  the  whole,  non-unionists."  ^ 

In  general,  it  may  be  said  truly  that  the  tendency  toward 
combination  and  cooperation  among  English  wage-earners  is 
growing  stronger  all  the  time. 

In  the  United  States,  also,  combinations  of  workers  followed 
the  introduction  of  the  Factory  System.  Labor  unions  proper, 
designed  to  improve  conditions  of  men  as  laborers,  began  in 
the  United  States  about  1825.^  From  that  time,  they  grad- 
ually increased  in  number  and  importance,  in  separate  groups 
of  occupations,  until  1869.  At  that  time  the  combination 
of  laborers  known  as  the  Knights  of  Labor  was  organized 
in  Philadelphia.  This  marks  a  new  epoch  in  labor  organ- 
izations in  this  country,  for  it  gives  a  sort  of  Federal  union 
to  the  separate  trade  unions,  and  even  to  unorganized  men. 
Examples  of  other  great  labor  organizations  in  recent  years 
are  the  Federation  of  Labor,  the  United  Mine  Workers  of 
America,  which,  under  the  leadership  of  John  McBride,  called 
from  150,000  to  200,000  men  out  of  the  coal  mines  in  1894; 
and  the  American  Eailway  Union,  which,  under  the  leader- 
ship of  Eugene  V.  Debs,  in  the  same  year,  involved  100,000 
or  more  railroad  men  in  a  historic  strike. 

Such  great  combinations  of  workers  have  often  performed 
acts  of  intimidation,  restrained  trade  and  transportation  of  the 
public  as  a  whole,  and  performed  numerous  other  acts  that 
have  been  declared  illegal  by  the  courts.  But  "combina- 
tions of  laborers  or  employers,  in  their  collective  capacity,  to 

1  Webb  and  Webb,  p.  430. 

2  Ely,  pp.  39,  40. 


THE   FACTORY  PERIOD  OF  INDUSTRY  183 

fix  wages  or  make  other  rules  binding  among  themselves,  are 
lejral."  '     This  has  been  true  since  the  Revolution. 

"The  progress  of  the  labor  movement  may  be  compared  to 
the  incoming  tide.     Each  wave  advances  a  little  further  than         ^ 
the  previous  one;  and  he  is  the  merest  tyro  in  social  science,)^  -  "^ 
and  an  ignoramus  in  the  history  of  his  country,  who  imagines V^t^r- 
that  a  permanent  decline  has  overtaken  organized  labor. "^      ^*'/  * 

The  significance   of    these    combinations   in   determining    "?'    - 
wages  and  conditions  of  labor  will  be  further  discussed  in 
Part  III. 

The  ratio  of  those  who  have  taken  part  in  the 

The  rolitical  ■,,,-,  i    ,  •  e    t-i       i        j 

Status  of  government  to  the  total  population  oi  Jinglana 
has  greatly  increased  during  the  centuries  since 
King  William  I.  The  wTesting  of  Magna  Charta  from  King 
John  (1199-1216)  and  its  thirty  or  m.ore  ratifications  from 
succeeding  sovereigns,  the  growth  of  the  English  Parliament, 
the  rebellion  against  Charles  I.  (1625-1649)^  the  election  of 
William  and  Mary  (1689-1702)  as  sovereigns  of  England,  the 
extension  of  suffrage  by  the  Reform  Bill  of  1832,  and  its 
still  further  extension  by  the  Acts  of  1884-1885,  are  repeated 
evidences  of  the  success  of  the  English  people  in  their  efforts 
to  gain  an  increasing  share  in  the  administration  of  national 
affairs.  Almost  complete  manhood  suffi-age  exists  in  England 
to-day  in  Parliamentary  elections,  and  almost  complete  man- 
hood and  w^omanhood  suffrage  exists  for  local  elections. 
Taken  altogether,  suffrage  is  more  extended  in  England  than 
in  the  United  States.  In  both  countries,  the  power  of  wage-^-, 
earners  through  the  ballot  box  is  now  practically  determined  • , . 
by  their  numbers  and  the  wisdom  of  their  trusted  leaders.  No..e;o<ih»ti- 
moasure  in  either  country  can  long  remain  in  force  without 
the  support  of  the  wage-earner's  vote.  His  political  enfran- 
chisement is  well-nigh  complete.  Of  the  rise  of  successive 
classes  of  the  English  people  to  political  power,  a  recent  writer 
says:  "With  the  final  dismissal  of   the  legitimate  monarch, 

'Stimson,  pp.  167,  168,  and  following. 
2Ely,  p.  90.' 


184  OUTLINES  OF  INDUSTRIAL  HISTORY 

James  II.  (1685_-1688),  and  the  substitution  of  a  foreigner 
/  in  his  place,  the_English  u^peiuclasaes  secured  that  constitu- 
tional ascendency  in  the  government  of  the  nation  which 
remained  with  them  for  just  one  hundred  and  fifty  years; 
-,  which  devolved  upon  the  middle  class  for  just  another  fifty 
years  in_1832;  and  has  now  been  transferred — with  what 
results  it  is  yet  too  early  even  to  attempt  to  forecast — to  the 
laboring  population."  ^ 

XI.   LEGAL  SOCIETY  AND  PBIVATE  BUSIXEfiS  EXTEEPEISES:    FREEDOM 
OF  COS  TRACT  AND  THE  RIGHT  OF  PRIVATE  PROPERTY 

Although    the    preamble    to    the    Second  Act, 

Kestrictions 

Upon  Inter-    of  Cougress,  uudcr  the  Constitution,  stated  om^ 

national  Trade. 

of  the  objects  of  the  law  to  be  "the  encourage- 
ment and  protection  of  manufactures,"  still  the  idea  of  a^tarifl 
for  protection,  as  contrasted  with  a  tariff  for  revenue,  gained 
ground  but  slowly  for  about  thirty  years.     It  then  became  a 
I Q'}(/  P^^^y  tenet,  and,  in  1824.  an  act  was  passed  which  "was  an 
''  ^      advance  on  all   preceding  tariffs  in  its  consistent  design  to 
exclude  foreign  competing  goods  from  American  markets."* 
i  The  southern  members  considered  it  "sectional,  unconstitu- 
I  tional,  and  unjust."     In  1828,  the  protective  idea  was  still 
'    further  emphasized.     After  that  date,  until  the  Tariff  Acts  of 
1861,  this  idea  rather  lost  ground.     Since  1861,  the  Republi- 
can party  has  persistently  upheld  the  doctrine  of  protection, 
and  the  Democratic  party  has  denounced  it.     In  the  national 
campaign  of  1896   the  respective  party  platforms  contained 
the     following    statements:     Republican — "We    renew    and 
emphasize  our  allegiance  to  the  policy  of  protection  as  the 
bulwark  of  American  industrial  independence  and  the  founda- 
tion of  American  developm.ent  and  prosperity;"  Democratic — 
"We  hold  that  tariff"  duties  should  be  levied  for  purposes  of 
revenue,  such  duties  to  be  so  adjusted  as  to  operate  equally 

'Taylor,  Introduction  to  a  History  of  the  Factory  System,  p. 
340—1886,  Bentley  &  Son,  London. 

2  Johnston,  History  of  American  Politics,  p.  100— 3d  ed.,  1893, 
Henry  Holt  &  Co.,  New  York. 


THE  FACTORY  PERIOD   OF  INDUSTRY  185 

throughout  the  country,  and  not  discriminate  between  class  or 
section,  and  that  taxation  should  be  limited  by  the  needs  of 
the  government,  honestly  and  economically  administered." 

For  nearly  the  whole  period  of  our  national  life,  therefore, 
the  doctrinejof.  interference,  for  the  supposed  national  good, 
with  international  trade  and  domestic  business  of  private 
persons  has  had  ardent  and,  during  much  of  the  time, 
triumphant  advocates  in  the  United  States. 

In  England,  the  Napoleonic  wars  furnished  the  occasion  for 
many  restrictions  upon  foreign  trade.     Likewise,  the  famous 
Corn  Laws,  enacted  from  1773  to  1815,  and  repealed  in  1846, 1 
were  a  perpetual  obstacle  in  the  way  of  would-be  exporters 
and  importers. 

These  bare  statements  of  fact  suggest  the  numerous  modi- 
fications, not  only  of  trade  contracts,  but  also  of  contracts  for 
manufactured  products  and  for  products  of  extractive  indus- 
tries, which  the  legislation  of  England  and  the  United  States 
has  caused  during  the  period  nov/  under  consideration. 
Private  business  in  both  countries  has  always  been  a  very 
different  thing  from  what  it  would  have  been  had  no  laws 
\  about  international  business  been  made  by  political  society. 
The  Growth  of  Xevcrthelcss,  in  spite  of  these  restrictions,  there 
*  "LLTAioiiy"^' was  growing  up  in  England,  during  the  last  of 
**  **'^'*  the  eighteenth  century  and  the  first  of  the  nine- 
teenth, a  belief  that  government  interference  with  productive 
enterprises  of  all  sorts  resulted  in  more  harm  than  good ;  in 
fact,  that  the  self-interest  of  individuals,  if  allowed  a  free 
reign  in  economic  matters,  would  work  out  the  greatest  possible 
good  to  all  parties  concerned.  Therefore,  contracts  between 
landlords  and  tenants  over  rents,  between  lenders  and  borrow- 
ers over  interest,  between  employers  and  employees  over  wages, 
and  many  other  contracts,  were  left  more  to  the  contracting 
parties  themselves  than  ever  before  had  been  the  case.  The 
common  saying,  borrowed  from  the  French,  was,  "Let  things 
alone;  let  them  take  their  own  course. "     The  repeal  of  the 

'Coasult  index  of  any  books  at  hand  on  political  economy. 


186  OUTLINES  OF  INDUSTRIAL  HISTORY 

Corn  Laws,  althongh  in  part  clue  to  the  influence  of  manufac- 
turers who  wanted  cheap  food  for  their  emplo3^ees,  was  also 
due  in  part  to  a  belief  in  the  soundness  of  this  principle. 

Still,  laws  that  were  inconsistent  with  laissez  faire  were  not 
confined  to  those  regulating  international  trade.  Laissez 
faire  was  never  freely  practiced.  Combinations  of  employers 
to  keep  wages  down  and  the  condition  of  wage-workers 
unfavorable,  were  allowed  in JEngland,  while  combinations  of 
workers  to  raise  wages  and  to  improve  conditions  of  wage-work- 
ers were,  as  we  have  seen,  forbidden.  Because  of  such  legis- 
lative inconsistencies,  and  also  because  of  the  fundamental 
fact  that  contracts,  as  a  rule,  turn  out  well  for  both  parties 
only  when  both  parties  are  equally  well  equipped  for  the 
economic  struggle  of  making  a  contract,  we  have  seen  that 
the  condition  of  wage-workers,  both  in  England  and  the 
United  States,  grew,  in  many  cases,  so  deplorable  that  a 
reaction  against  laissez  faire  set  in,  and  a  long  conrse  of 
factory  legislation  was  entered  upon  in  both  countries,  the 
end  of  which  is  not  yet.  Anti-monopoly  and  anti-trust  legis- 
lation has  also  been  very  frequent  in  the  United  States.  ^ 

Furthermore,  contracts  of  many  kinds,  especially  wage  con- 
tracts, are  made  miore  and  more  between  a  combination  of  men 
on  the  one  side  and  a  combination  of  men  on  the  other  side. 
Tlius,  through  voluntary  action  in  grouj^s,  as  well  as  by  legis- 
lation, great  social  restriction  is  placed  upon  individual  free- 
dom of  contracts. 

In  brief,  it  may  be  said : 

1.  Society,  through  its  law-making  bodies,  in  both  England 
and  the  United  States,  still  interferes  with  individual  freedom 
of  contract,  that  is,  with  private  business, 

2.  These  legal  interferences  are  now  less  with  the  details  of 
contracts  than/ with  the  limits  within  which  the  contracting 
parties  may  bargain  v/ith  each  other. 

3.  Men  also  voluntarily  limit  their  own  freedom  of  contract 

Torrsst,  Anti-Monopoly  Legislation  \in  the  United  States, — "The 
American  Journal  of  Sociology,"'  January,  1896,  pp.  411-435. 


THE  FACTORY  PERIOD  OF  INDUSTRY  187 

by  social  agreements,  associations,  and  combinations  of  many 
kinds. 

4.  In  sjoite  of  all  restrictions,  the  economic  relations  of  men 
to  each  other  during  the  Factory  Period  hare  been  determined 
less  by  custom  and  by  past  conditions,  and  more  by  contract 
on  the  basis  of  existing  conditions,  than  ever  before. 

During  this  period,  individuals  have  been  pro- 

Social  Property  °  ^  '  .  ^ 

versus  Trivate  tcctcd  bv  STOvemments  m  the  complete  exercise 

Property.'  i         •    , 

of  the  right  of  property  over  almost  every  species 
of  good  that  can,  by  its  nature,  be  exclusively  appropriated 
by  an  individual.  Both  natural  and  legal  persons  (corpora- 
tions) have  exercised  the  exclusive  right  of  property  over 
natural  resources,  accumulations  of  wealth,  economic  proc- 
esses, charter  privileges,  inventions,  etc.,  to  such  an  extent 
that  certain  classes  of  thinkers  have  been  led  to  the  opinion 
that  the  general  welfare  demands  radical  restrictions  upon  it. 
Socialists,  for  example,  believe  that  all  natural  _  resources, 
exclusive  economic  privileges,  and  capital,  should  be  social 
rather  than  private  property. 

In  a  democratic  country,  as  the  opinion  in  favor  of  the  private 
ownership  of  anything  prevails,  so  are  the  legislative  and  admin- 
istrative powers  of  government  enlisted  to  enforce  that  opin- 
ion. On  the  other  hand,  just  so  far  as  the  opinion  in  favor  of 
public  or  social  ownership  of  anything  prevails,  government 
tends  to  enforce  that  opinion. 

It  is  necessary,  therefore,  to  state  further  in  this  connection, 
with  all  the  emphasis  possible,  that  side  by  side  with  the  facts 
of  private  ownership  during  this  century  there  exists  also  a 
great  body  of  facts  concerning  more  or  less  successful  attempts 
at  social  ownership.  Consequently,  while  the  question  of 
private  ownership  versus  social  ownership  is  being  asked  in  a 
multitude  of  particular  instances  with  an  altogether  new 
insistence  in  these  days,  in  giving  an  answer  in  any  particular 

'  Cousult  recent  files  of  such  magazines  as  "The  Forum,"  "Review 
of  Reviews."  and  especially  "Municipal  Affairs,"  for  articles  on 
various  forms  of  social  ownership. 


188  OUTLINES  OF  INDUSTRIAL  HISTORY 

case  even  the  ordinary  voter  does  not  need  to  decide  blindly  or 
dogmatically.  The  experiences  of  various  cities  in  owning 
their  own  street  railways,  light  and  water  plants,  parks,  baths, 
museums,  and  other  kinds  of  property ;  and  the  experiences 
of  countries  with  the  telegraph,  railroads,  and  steamship 
lines,  are  already  sufficient  for  the  formation  of  an  intelligent 
opinion  respecting  the  probable  results  of  similar  proposed 
attempts  in  the  voter^s  own  town,  city,  or  country. 

Among  all  the  motives  which  can  be  seen  to  have  stimulated 
the  great  variety  of  economic  legislation  glanced  at  in  these 
pages,  the  highest  has  been  a  genuine  desire  for  the  welfare 
of  all  the  persons  in  the  communities  affected  by  that  legisla- 
tion— for  social  welfare  rather  than  for  private  welfare.  From 
this  point  of  view,  two  criticisms  may  be  made : 

1.  Sometimes  the  real  purpose  of  legislation  was  to  secure 
private  welfare  rather  than  social. 

2.  Sometimes  too  little  care  was  taken  to  form  a  sound 
opinion  as  to  the  probable  results  of  a  law. 

Suggestive  ^-  ^V^^t  accounts  have  you  read  of  early 
Questions,  attempts  to  introduce  machinery  of  different 
kinds  into  the  United  States?  Relate  some  of  these  stories. 
-  2.  What  novels  have  you  read  which  describe  the  changes 
in  any  industry  from  hand  methods  to  machine  methods 
of  production?  Give,  in  brief,  the  story  of  some  one  of 
them.  .u-^'-^(',  I'Unrc    ^ 

3.  Give  accounts  of  some  of  the  consolidations  of  railways, 
steamship  lines,  or  any  other  business  enterpris.^  of  which  you 
have  personal  knowledge.  '^-.^  P 

4.  Why  did  these  combinations  take  place?  Who  brought 
them  about?  •       . 

5.  What  laws  were  made  to  help  or  to  hinder,  these  consoli-. 
dations?     With  what  results?  ji^T'iM^-f^^^A^^' 

6.  Give  accounts  of  the  transportation •oi  fresh  meats,  fruits, 
and  vegetables,  long  distances.  How  were  these  things  done? 
Why  were  they  done?  ' '  i  ''•'  ,5^'"^  '  'f  '" 

7.  Give  illustrations  of  changes  in  agricultural  methods. 


THE  FACTORY  PERIOD  OF, INDUSTRY  1B9 

.    -  e  ■-     .'  ^  ->-   ?*^=-^--'  -  :  ■   '       ' 

crops,  fertilizers,  etc.,  which. have  taken  place  in  any  locality. 
Why  were  these  changes  made? 

8.  Describe  the  process  by  wliich  any  persons  known  to  you 
have  been  led  to  give  up  business  for  themselves  and  to  go  to 
work  for  somebody  else.  In  wliat  respects  are  they  now  better 
off  than  before?     In  what  respects  worse  off? 

9.  Show  how  a  man  in  Xew  York  or  London  can  buy  a 
cargo  of  wheat  in  Chicago,  hire  a  boat  on  which  to  carry  it, 
hire  men  to  load  the  boat,  pay  for  the  wheat,  get  it  insured, 
and  know  that  it  is  on  the  way  toward  him,  in  a  few  hours 
time. 

10.  Ask  business  men  for  the  quickest  time  known  to  them 
in  some  such  transaction.     Tell  how  it  was  done. 

11.  Comj)are  these  facts  with  what  could  have  been  done  a 
hundred  years  ago.  'A 

12.  Make  inquiries  among  the  most  intelligent  people 
about  you  to  find  out  what  they  know  of  such  industrial  his- 
tory as  has  been  given  in  Part  II. 

13.  Make  similar  inquiries  among  trade  union  members. 
Where  do  you  find  the  best  informed  men? 

14.  Give  all  the  examples  known  to  you  of  attempts  on  the 
part  of  employers  to  make  employees  more  interested  in  the 
business.^  .     ,  .        / 

15.  How  have  these  attempts  succeeded? 

IG.  Give  as  many  illustrations  as  you  can,  from  your  own 
observation,  of  men  who  are  now  working  according  to  the 
methods  of  the  Home  System,  Gild  System,  Domestic  System. 

17.  Why  are  they  so  working?     What  kind  of  a  living  do  ' 
they  get? 

18.  Describe  any  attempts  known  to  you  that  are  being 

made  to  get  people  out  of  the  cities  to  become  extractors. 

Are  they  successful  attempts?  /...v:  ^^ 
,-  '       ,/" 

'Howerth,    Profit-Sharing   at   Tron/iZoZe  —  July,    1890;   Monroe, 

Possibilities  of  the  Present  Industrial  Sljstem— May ,  1898;  Monroe, 

Profit-Sharing    in    the    United    States— May,    1890;    nil    in    "The 

American  Journal  of  Sofiolopv." 


100  OUTLINES   OF  INDUSTRIAL  HISTORY 

. >  19-  Ask  people  who  have  gone  from  the  country  to  the  city 

why  they  v/ent.     Give  results  of  change. 
^      20.  Describe  some  attempts  which  are  being  made  to  make 
,i^0£sAnj  city  a  better  place  in  which  to  live. 

■    r    21.  Eeacl  the  advertising  and  want  columns  of  a  daily  paper, 

-^   |and  make  a  list  of  the  different  kinds  of  services  that  can 

jbe  bought  now.     How  does  the  list  compare  with  the  services 

that  could  be  bought  a  century  ago?     What  has  made  the 

difference? 

22.  Of  what  value  is  a  sketch  of  industrial  history  in 
an  attempt  to  understand  the  present  industrial  system? 
Explain.    '''''-'!  <~f<  x<-'  -     <p-a.x(  -■    •  ;' .'. 

23.  When  a  voter  is  trying  to  settle  the  question  as  to  his 
vote  for  or  against  social  ownership  of  gas  works,  water  works, 
etc.,  for  his  city  or  town,  ought  he  to  seek  to  aid  the  public 
as  a  whole— social  jY^lfaro — or  merely  the  private  welfare  of 
some  group  of  men  or  section  of  the  town?  How  can  he  be 
sure  of  his  intentions? 

24.  What  care  ought  he  to  take  to  inform  himself,  from  the 
experiences  of  other  places  that  have  tried  both  social  owner- 
ship and  private  ownership,  as  to  the  probable  result  in  his 
own  town? 

25.  If  the  intention  of  voters  is  to  secure  the  social  v/elfare, 
and  great  care  is  taken  to  get  all  possible  information,  what 

ijcan  you  say  of  the  seriousness  of  mistakes  likely  to  be  made? 

[Note.— For  detailed  suggestions  as  to  further  social  eco- 
nomic study,  accompanied  by  selected  bibliography,  see 
Howerth,  A  Programme  for  Social  Studij,  "The  American 
Journal  of  Sociology,"  May,  July,  and  September,  1897. 

For  valuable  bibliography  on  municipal  questions  see 
Brooks,  BiUiograi^liy  of  the  Siveaiing  System,  "Municipal 
Affairs,"  vol.  I. 

For  description  of  social  economics  in  official  publications 
of  the  United  States  see  Wright,  Contributions  of  the  United 
States  to  Social  Science,  "  The  American  Journal  of  Soci- 
ology," November,  1895.] 


PART  III 

ELEMENTS   OF   ECONOMIC   THEORY 


Chapter  I^ 

utility,  value,  axd  contracts 

Introductory  1.  Show  that  all  goods  are  not  equally  necessai'y 
and  guestions.  to  the  suppoi't  of  human  life. 
2.  Mention  several  commodities  that  differ  in  this  respect. 

^  Very  few  references  will  be  cited  in  Part  III.  It  is  earnestly 
recommended  that  a  small  library  of  the  best  books  on  economics  be 
secured,  and  that  each  pupil  consult  at  least  one  of  these  books  by 
means  of  its  index  as  the  text  is  read.  The  following  are  among 
the  best  for  this  purpose : 

■y  Bullock,  Introduction  to  the  Study  of  Economics;  Davenport, 
Outlines  of  Elementary  Economics— The  Macmillan  Co.,  New  York; 
Elyj.  Outlines  of  Economics,  College  edition — Eaton  &  Mains, 
Boston;  Laughlin,  The  Elements  of  Political  Economy — Ameri- 
can Book  Co.,  Nevv-  York;  Marshall^^^Ze hi e/zfs  of  Economies  of 
Industry — The  Macmillan  Co.,  New  York;  Walker,  Political  Econ- 
omy, briefer  course — Henry  Holt  &  Co.,  New  York. 

''As  much  of  the  original  material  can  be  had  for  the  asking, 
there  is  no  reason  why  every  library  should  not  be  abundantly  sup- 
plied with  it.  First,  tliere  are  the  financial  columns  of  tlie  news- 
papers— so  neglected  by  the  general  reader.  BradstreeVs  and  the 
Commercial  and  Financial  C/jron/de  give  similar  matter  much  more 
fully,  but  they  are  expensive.  By  keeping  on  tlie  blackboard  the 
current  quotations  for  sterling  exchange,  the  rate  of  interest  on 
call  loans,  and  the  prices  of  silver,  wheat,  cotton,  making  tlie  work 
one  of  cooperation  by  the  class,  material  will  be  at  liand  to  illustrate 
many  a  delicate  point.  Bank  statements  can  be  found  in  the  nevvs- 
j^apers,  or  on  leaflets  di.striljuted  directly  from  the  banks;  these 
should  be  studied  until  they  are  understood.    City  finance  reports 

191 


192  ELEMENTS  OF  ECONOMIC  THEORY 

3.  Make  four  or  five  groups  of  men's  wants,  and  arrange 
them  in  the  order  of  the  necepitj  pf  tlieir  satisfaction  to  the  ' 
continuance  of  life.  :  -'  J  '      '')  '  T   .. 

4.  Do  men  ever  make  greater  efforts  to  obtain  goods  not 
(necessary  to  life   than   to  obtain   those   that  are  necessary? 

Illustrate,     Give  reasons  for  such  action.  '^'"-''^  *•  - ' '  '>      .    ■■   :  - 

5.  How  does  a  man  who  produces  most  of  the  utilities  he 
consumes  decide  when  to  turn  from  the  production  of  one  to 
that  of  another? 

6.  How  do  boys  decide  whether  to  play  base-hall  or  tennis 
if  the  choice  is  offered?  ,,Will^  th^^^ame  bpv  decide  the  samd 
way  every  time?'   Why?  '      '^  '  ;' ~    '         ^'  c.  i^,,,,.„.. 

7.  What  use  did  you  make  of  your  last  month's,  allowance 
of  spending  money?     \\  hy?  i^.t-. -fl 

8.  Will  you  spend  the  allowance  of  next  month  in  the  same 
.way?     Why? 

and  state  auditor's  reports  bring  the  student  into  touch  with  his 
immediate  surroundings.  The  Consular  Reports,  issued  by  the 
Department  of  State,  give  information  about  industrial  conditions 
in  foreign  countries.  The  Bulletins  and  Reports  of  the  Department 
of  Labor  constitute  a  mine  of  information  on  the  labor  question. 
The  Treasury  Department  issues  many  valuable  documents ;  among 
them  is  a  handy  little  pamphlet  abovit  coinage,  currency,  and  the 
production  of  the  precious  metals;  also  copies  of  the  recent  tariff 
acts.  The  Bureau  of  Statistics  issues  the  Statistical  Abstract  of  the 
United  States,  an  annual  volume  of  over  300  pages ;  this  is  the  most 
valuable  collection  of  material  for  the  use  of  elementary  students 
that  can  be  found.  Some  of  the  numbers  of  Sound  Currency  may 
be  used  without  partisanship,  such  as  'Currency  Statistics'  and 
'Coinage  and  Currency  Laws  of  the  United  States' ;  the  latter  is 
invaluable."  —  Clow,  Economics  as  a  School  Study  —  Economic 
Studies,  vol.  IV,  no.  H,  pp.  230,  231,  American  Economic  Association. 
Many  of  the  most  earnest  weeklies  and  monthlies  among  the  peri- 
odicals also  contain  frequent  articles  of  great  interest  and  value  to 
students  of  economics.  Some  such  articles  have  been  cited  in  the 
list  of  periodicals  at  the  end  of  Part  III.  Such  material  is  access- 
ible to  all,  but  should  not  be  read  to  the  exclusion  of  some  more 
complete  statement  of  economic  theory  than  has  been  attempted  in 
Part  III. 


UTILITY,    VALUE,    AND  CONTRACTS  193 

9.  Can  yon  always  bny  the  same  amonnt  of  a  particular  ..^^^^,,^^, 
thing  for  the  same  amount  of  money?     Why?  *         ~  {^^  '  a 

10.  Why  do  boys  "swap"  jackknives  for  marbles? ^^-^Ki 

11.  Is  a  purchase    usually  beneficial    to  both    buyer  and 
seller?     Why? 

12.  Are  there  exceptions  to  the  truth  of  your  statement?  Why? 
What  is  Here  '^'^^  ^^^  questioiis  to  whicli  a  definite  answer 

Attempted,    ^yji^  \^q.  giveu  in  this  chapter  are:    (1)   What/ 
determines  the  particular  good  which  a  man  will  first  strive  to 
obtain,  and  when  will  he  turn  from  seeking  this  good  to  pur- 
sue another?     (2)  What  determines  the  amount  of  one  com-JY^j^  ^^ 
modity  that  can,  at  a  certain  time,  in  a  certain  market,  hi  "' 
exchanged  for  a  definite  amount  of  another  commodity? 

Two  Factors    ^^^  auswer  to  the  first  question,  it  may  be  said  in 
Present.       general    that  men^  strive  to   possess    desirable 
Ihings  according  to  the  intensity  of  their  desires  for  them. 
But  the  intensity  of  any  person's  desire  for  a  special  good  at  a 
special  time  depends  upon:    (1)  the  kind  of  utility  it  has — ( 
that  is,  utility  to  satisfy  hunger,  thirst,  cold,  desire  for  knowl-,' 
edge,  companionship,  beauty,  spiritual  uplift,  etc. ;    (2)  the\ 
quantity   of    that  kind  of   utility  which    has    already  been  | 
appropriiitedjoward  the  satisfaction  of  this  desire. 

niustrations  of  ^  ^^"^ngry  boy,  in  an  orchard,  finds  the  first  big 
****  ouanmy*  "^  ^^^  ^PP^®  intensely  Satisfactory.  The  second  is 
on  Desire,  scarccly  Icss  SO.  But,  if  lie  eats  a  third  and  a 
fourth  and  a  fifth,  he  reluctantly  admits  to  himself  that  he 
doesn't  like  apples  so  well  as  he  thought  he  did.  In  compar- 
ison with  hunting  or  nutting,  going  over  to  see  Tom  on  the 
adjoining  farm,  or  even  following  the  men  in  the  harvest 
fifcld,  eating  apples  soon  ceases  to  be  attractive,  AVhat  youth 
does  not  remember  his  disgust  at  himself  at  losing  his  appetite 
before  he  had  cleared  tlie  table  of  all  the  good  things  that 
'oad  American  tables  on  Thanksgiving  day?  Van  Bibber,  in 
one  of  Richard  Harding  Davis's  stories,  makes  use  of  this 
peculiarity  of  human  want  in  forcing  a  hungry  beggar  to  eat 
to  satiety  as  a  punishment.      The  utility  of  food  in  this  case 


194       ELEMENTS  OF  ECONOMIC  THEORY 

became  negative.  *  'Enough  is  as  good  as  a  feast, ' '  "Familiarity 
breeds  contempt,"  and,  "Too  much  of  a  good  thing"  are 
sayings  which  had  their  origin  in  universal  human  experience. 
Desire  for  any  particular  thing  usually  grows  less  with  con- 
tinued consumption  of  its  utility. 

In  the  case  of  the  boy  and  the  apples,  the  last  apple  eaten 
and  the  first  one  left  uneaten  are  often  called  "marginal." 
If  he  had  found  plums  as  well  as  apples  in  the  orchard,  the 
decision  to  eat  no  more  apples  would  probably  have  been 
earlier,  and  numbers  two  and  three,  instead  of  five  and  six, 
might  have  been  the  marginal  apples.  In  any  case,  he  would 
stop  eating  apples  the  moment  his  satisfaction  from  that 
process  became  less  than  the  satisfaction  from  doing  some- 
thing else. 

A  person  who  is  free  to  do  as  he  chooses  and  can  by  effort 
satisfy  wants  of  gi'cat  variety  chooses  first  the  satisfaction  of 
tliat  want  which  at  the  time  he  feels  most  keenly.  In  vaca- 
tion time,  when  the  student  is  free  to  follow  his  own  whim, 
he  plays  tennis,  golf,  and  base-ball;  swims,  rides  his  wheel, 
eats,  reads,  and  tramps,  as  the  desire  for  one  thing  or  another 
is  more  keenly  felt. 

Absolute  utuity  ^^  ^'®  ^®^®  ^^  classify  different  goods  from  the 
wTtiTEffectfve  PO^"t  of  vicw  of  the  preservation  of  human  life, 
utiiify.i  some  would  be  found  more  necessary  to  life 
than  others.  For  example,  food,  air,  and  water,  and  clothing 
and  shelter  in  cold  climates,  are  absolutely  necessary  to  life. 
On  the  other  hand,  many  forms  of  service  which  tend  to  satisfy 
intellectual,  esthetic,  and  spiritual  wants  are  not  necessary  to 
the  continuance  of  the  physical  life  of  man.  In  a  true  sense, 
then,  those  things  which  are  necessary  to  the  continuance  of 
life  may  be  said  to  possess  a  high  intrinsic,  or  absolute,  utility ; 
while  those  tlimgs  which  are  not  necessary  to  life  possess  a 
lojL  absolute  utility.  C4ood3  might,  then,  be  arranged  in  a 
long  series,  from  those  possessing  the  greatest  absolute  utility 

'Compare  (using  index)  Clark,  The  Philosophy  of  Wealth— Ginn 
&  Co.,  Boston. 


/^ yiiX^-eyi^L^iUXA  j-Ag^jr^U^^^  r^  /*^cC<--JC^''iiy  AA 


l^eu-ii^ 


'i-^Y 


UTILITY,   VALUE,    AND   CONTRACTS  195 


to  those  possessing  the  least.  If  a  man  lacks  all  kinds  of 
goods,  he,  as  a  rule,  strives  to  obtain  first  those  which  have  the 
liigliest  absolute  utility.  The  human  race  has  done  similarly. 
It  is  not  intended  here  to  cover  up  the  fact  that  certain  men 
have,  all  through  the  centuries,  given  up  everything  they  pos- 
sessed, even  physical  life,  for  the  sake  of  freedom  to  thiiik  and 
worship  as  they  thought  right.  Wherever  men  and  women 
have  had  to  choose  between  Icing  something  less  and  Itaving 
sometliiug  less,  many  noble  souls  have  always  been  ready  to 
Jtace  less  and  be  more.  So  long  as  men  have  life,  however,  so 
long  as  their  being  something  depends  upon  a  continuance  of 
that  life,  even  the  noblest  buys  bread,  rather  than  poems,  with 
his  last  nickel.  It  is  in  view  of  the  dependence  of  the  intel-| 
lectual  and  spiritual  life  of  a  man  upon  his  physical  life  that 
the  absolute^ utilities  of  food,  clothings  mid_shelter_liave  beenj' 
called  highest.  Only  as  men  and  races  have  been  able  to 
keep  the  clamorous  desires  for  food,  clothing,  and  shelter 
somewhat  satisfied  by  supplies  of  appropriate  goods,  have 
desires  for  knowledge,  beauty,  and  spiritual  insight  usually 
made  themselves  felt. 

By  adding  to  the  quantity  of  a  good  whose  absolute  utility 
is  highest,  a  person  may,  for  the  time,  feel  more  keenly  a 
desire  for  something  else  whose  absolute  utility  is  low.     If  the! 
quantity  of  anything  whose  utility  is  high  absolutely  is  so  great 
that  the  absence  of  a  certain  amount  does  not  appreciably  take 
away  from  his  enjoyment,  its  effective  utility  to  him,  at  the  i 
moment,  is  low.     On  the  otherTiand,  if  the  quantity  of  a 
thing  with  low  absolute  utility  is  small,  the  lessening  of  that  ^T^y^ 
quantity  may  take  away  much  from  his  enjoyment,  and  the;'**^^ 
effective  utility  of  it  at  the  time  therefore  be  high.     Not  iul  ^ 


)nj/ 


proportion  to  the  absolute  utilities  of  goods,  but  in  proportioni/^.^^^ 
to  their  effective  utiliti£a^  do  men  strive  to  obtain  them. 
When  the  quantity  of  a  thing  whose  absolute  utility  is  higii 
has  become  so  great  that  another  thing,  with  perhaps  lower 
absolute  utility,  has  a  higher  effective  utility,  a  man  turns 
from  his  effort   to  secure    more  of   the  first    and   works  for 


^  hsy-^^^\^  \^tr^ — L 


196       ELEMENTS  OF  ECONOMIC  THEORY 

the  second.  Taking  one  liour  with  another  and  one  day  with 
[another,  he  tries  so  to  apportion  his  efforts  that  the  effective 
utility  of  one  thing  will  be  the  same  as  that  of  another ;  in 
other  words,  so  thtit  one  want  will  not  be  felt  more  keenly 
than  another.  The  human  race  is  continually  making  the 
same  effort. 

j^'  Some  men  and  some  nations  struggle  hard  to 

saU8*faction    "keep  the  wolf  from  the  door,"  while  others  are 

""by^Aii.*'**    seldom   hungry,   cold,  or    unsheltered    from  a 

storm.     Certain  classes  of  wants  are  commonly 

felt  by  the  poor,  and  very  different  wants  are  at  the  front  with 

the  rich.     But  among  all  the  wants  realized  most  keenly  by 

each,  effort  is  so  apportioned  that  one  is  nearly  of  the  same 

intensity  as  the  others.     This  is  done  very  largely  by  varying 

the  quantity  factor  in  effective  utility. 

A  student  with  an  allowance  has  to  decide  how 

Examples  In-  .  i    i  • 

voiving  the  Use  to  Spend  it.     With  him  the  choice  is  not  between 

of  Money.  ^ 

the  money  and  one  thing  which  it  will  buy,  but 
between  one  thing  which  it  will  buy  and  other  desirable  things 
which  may  be  bought  with  it.  He  compares  the  effective 
utilities  of  all  the  things  desired,  and  chooses  the  one  whose 
effective  utility  is  highest.  If  he  spends  one  dollar  for  a  con- 
cert, rather  than  add  a  new  book  to  his  library,  it  is  because 
the  effective  utility  of  the  concert  is  the  higher.  Next  week 
he  may  do  the  same  thing,  and  possibly  the  next  after.  But, 
if  the  concerts  continue  of  about  the  same  character,  the 
time  is  likely  to  come  before  many  weeks  when  the  book  will 
seem  more  attractive  than  another  concert.  In  a  similar  way, 
he  decides  between  a  new  tennis  racket  and  a  class  pin, 
between  a  tally-ho  ride  and  a  game  of  base-ball  which  demands 
an  admission  fee.  He  buys  the  good  chosen  at  the  expense  of 
the  most  highly  desired  good  rejected. 

A  man  with  a  small  income  decides  whether  to  spend  five 
dollars  for  a  ton  of  coal  or  two  tickets  to  the  grand  opera. 
He  buys  the  coal  at  the  expense  of  an  evening  at  the  opera. 
A  man  with  a  larger  salary,  whose  coal-cellar  is  already  well 


( 


UTILITY,   VALUE,   AND   CONTRACTS  197 

filled,  may  have  to  decide  between  the  opera  and  a  monthly 
banquet.  The  opera  seems  more  attractive.  These  two 
expenditures  of  five  dollars  show  that  each  spends  his  money 
for  the  one  thing,  of  two  or  more,  whose  effective  utility  to 
him  is  highest,  and  also  that  the  choices  were  made^jgn 
different  levels  of  want. 
^„^^,_         Value  .corresponds   to  effective  utility.     When 

Distinction  -,.,.,.  ,       ,  •        ii  •. 

Between  Value  the  word  utuity  IS  ussd  alone  in  these  pages,  it 
means  absolijite^  utility.  Men  arrange  schedules 
of  desirable  things,  as  we  have  seen,  according  to  their 
effective  utilities.  They  value  them  in  the  same  order.  As  a 
man  values  a  thing  will  he  jiut  forth  effort,  or  sacrifice  other 
enjoyments,  for  it.  Air  and  water  are  necessary  to  the  con- 
tinuance of  physical  life.  Their  absolute  utility  is  high. 
But,  owing  to  the  quantity  of  them  usually  available  to  man, 
even  in  cities,  the  value  of  the  quantity  used  is  low.  Make 
them  scarce,  and  their  value  rises.  "All  that  a  man  hath  will 
he  give  for  his  life,"  and  for  the  means  of  life  as  well. 

Our  final  answer  to  the  first  question  jjroposed  is,  therefore,  • 
as  follows:  A  man  first  tries  to  obtain  that  good  whose  value | 
to  him  is  gi'eatest,  and  he  turns  from  pursuit  of  that  when,  byi 
increasing  the  quantity  in  his  possession,  the  value  of  it  has  | 
been  lowered  below  the  value  of  some  other  good. 
The  Formula  ^^'0^1  the  poiut  of  view,  therefore,  of  any  single 
for  Value,     persoii,   the  factors    outside  of  himself  which 
determine  his  valuations  of  all  things  that  seem  desirable  to 
him  jire  expressed  in  this  formula: 

-."'1      -1         1     i  i  1.  Absolute  utility. 

^/l4J^'';^;ai^'""""  "p""  i  2-  Quantity. 

Another  statement  of  this  truth  which  gives  a  correct 
impression  about  the  number  of  goods  that  have  utility  com- 
pared with  the  number  that  have  value  is  this : 

f  1.  I'hose  having  little  or  no  value  because  the  ^^^^^^  T 
Goods  having  )  quantity  is  so  great.  ,.,•.••      -  ^  / 

utility:        1  2.   Tlioso    so  limited   in    quantity  that    tlioy^''\«_^ 
have  value. 


198  ELEMENTS   OF   ECONOMIC  THEORY 

I  /  /  The  substitution  of  a  good  with  higlj^ ^sohite  utility  for 
one  with  lo-vpnbsoluto  utility,  or  the  decrease  of  the  quantity 
of  a  given  good  tends  to  increase  the  value  of  a  unit  of  the 
good  resulting.  ^^^  ^ 

'2,  1  On  the  other  hand,  thej^uhstTJTijjfm_nf  a  gnnd  wif:h  low 
alLSQlutejitilitx_f or  ^  fflod  with^lgh  absolute  utility  or  the 
incriiasainJJie,  quantltyLof  a  given  j^ooJ..  tends  to^  decreaseJlje 
A;rijiie  of  a  unit  of  the  good  resulting. 

In  other  words,  value  varies  directly  with  absolute  utility, 
and  indirectly  with  quantity. 
luustrations    ^-  ^^^  ^^  *^®  followiug  illustrations  harmonize 
and  Questions,  ^^.^fch  the  fomiula  of  value?  r^, 

a.  A  suit  of  clothes  was  iiew,  and  now  it  is  old.  > 
i.  A  tr6e  that  has  given  only  shade  begins  to  4)ear 

c.  A  wojnan's  hat,  although  "as'  good  as  new," 
goes  oivE  of  style.    ^<'^'>         a, 

d.  A  tool  is  made  that  enables  a  man  to  accomplish 
twice  as  much  in  a  given  time  as  with  the  ^ne^he 
has.       t-v^  e^ .  ^    y  ,-     , 

e.  The  pneumatic  tire  celiipetes  with  thesoli^  rubber 
tire.     Jt^i^^-ex/l '^ 

f.  A  man  was  dependent  upon  his  own  wages,  but 
inherits  a  fortune.  '^  '^^'^^  ■ 

g.  A  millionaire  becomes  bankrupt.     ( ^p^tc^i^^ 

h.  While  a  man's  i;icoinB  remains  the  same,  the  com- 
modities he  can  gee  with  a  dollar  grow  fewer.   /Gb^^ 
i.  His  income  remaining  tlie  same,  he  can  btiy  more 

commodities  for  each  dollar.      :^'     -  _ . 
j.  Automobiles^bebome  cheap  in  price ;and  cost  less  to 
run  than  it  costs  to  keep  a  horse.  ((Ju^i^  J z^caJ,  ' 
2.  Mention  some  of  the  methods,   not  wholly   under  the 
f^,^  control  of  a  man  himself,  by  which  the  per  cent  of  his  total 
income  that  he  may  spend  for  himself  and  family  may  be 
\  increased  or  diminished.     Give  similar  examples  of  changes  in 
what  a  dollar  will  buy. 


UTILITY,    VALUE,    AND   CONTRACTS  199 

3.  "What  things  that  have  utility  are  also  valuable?    ' 

4.  Suppose  you  reiweaent  a  value  level  and  a  utility  level, 
by  two  lines,  and  vai'ious  things  by  the  letters  x  and  ?/,  thus : 

■^         Value  lorol      ^     ^-     ll"  r  ^f^^^-:    ->-^  -  -^  ^,|^i- 


Suppose,  further,  that  there  are  below  both  levels  material 
things  (y  y)  that  a  man  feels  no  want  for.  They  have  no 
want-satisfying  quality  to  him.  Explain  how  they  may  be 
brought  above  the  level  of  utility  {y^ y')  and  then  above  the 
value  level  {y"y"). 

5.  Suppose  other  material  things  {x  x)  to  exist  above  the 
value  level  of  the  same  man.  Ex^ilain  how  they  may  sink 
below  the  value  level  {x'x')  and  then  below  the  utility  level 

G.  Give  illustrations  from  common  life  for  each  of  the 
above  cases.  *'^- 

a.  Think  of  a  tin  can,  when  full  of  fruit  and  scaled, 
when  used  as  a  flower-pot,  and  when  lying  with 
other  empty  cans  in  the  alley,  for  one  case.  Give 
another  similar  case. 

b.  Might  a  sandpile,  or  a  layer  of  stone  under  the 
soil,  illustrate  the  first  stage  of  the  other  case? 
Explain. 

7.  For  men  in  general,  is  there  a  continual  rise  and  fall  of 
materials  past  the  utility  and  value  levels?  Why? 
"n^Tiitioris  in  ^^  lien  a  farmer  voluntarily  trades  a  horse  witli  his 
Trade.  neighbor  for  two  cows,  each  gives  that  which  to 
him  is  of  less  value  for  that  which  is  of  more  value.  At  least, 
this  is  each  man's  opinion  at  the  time.  The  farmer  with  his 
horse  may  have  had  his  stock  of  working  horses  increased  by 
"breaking  in"  a  colt,  so  that  one  of  the  older  horses  coidd 
be  spared  without  causing  him  much  inconvenience;  at 
the  same  time,    his  cows    are   not   giving   milk   enough   to 


200  ELEMENTS  OF   ECONOMIC  THEORY 

supply  his  customers,  and  he  needs  more  cows.  On  tho 
other  hand,  his  neighbor  has  decided  to  reduce  his  pas- 
ture land  and  raise  more  corn,  and  needs  another  horse  to 
make  up  a  team  for  the  plough.  Tho  effective  utility,  tho 
value,  of  what  A  offers  is,  therefore,  gi-eater  to  B  than  the 
value  of  what  he  himself  offers,  and  contrariwise.  Both 
would  have  been  gainers  to  "trade  even."  Did  they  trade 
even?  For  the  sake  of  simplicity  of  illustration,  we  may  sup- 
pose that  the  trade  was  between  these  two,  and  neither  tried 
to  see  whether  he  could  do  better  by  trading  with  somebody 
else,  or  by  selling  for  money  and  buying  what  he  wanted  with 
the  proceeds,  although  both  of  these  courses  are  usually  consid- 
ered by  actual  traders.  But  shut  up  to  each  other,  did  tho 
farmers  trade  even?  If  each  valued  the  other's  possession  onlj- 
a  little  higher  than  his  own,  it  is  likely  they  did.  If  eacti 
valued  the  other's  possession  much  higher  than  his  own,  or  if 
either  did  so,  they  may  not  have  traded  even.  Suppose  the 
man  with  the  horse  would  really  give  his  horse  and  ten  dollarsi 
^rather  tban  not  get  J the  cows.  If  his  neighbor  is  shrewd^ 
enough  to  detect  this  eagerness,  he  may  get  the  horse  and 
"boot"  to  the  amount  of  one  to  ten  dollars  for  his  cows.  II 
the  man  with  the  cows  were  the  eager  one,  from  one  to  tec 
dollars  might  have  been  paid  the  other  way.  In  each  of 
these  cases,  if  nearly  all  the  gain  from  the  trade  went  to  one 
man,  it  was  possible  for  him  to  gain  something  more  than 
ten  dollars,  for  he  would  have  been  benefited  to  trade  even; 
and  the  other  gained  something,  in  his  own  estimation,  even 
though  he  paid  ten  dollars  "boot,"  else  he  would  not  have 
traded. 

Suppose,  now,  that  eaoh  man  had  been  willing  to  give  ten 
dollars  rather  than  not  trade.  To  trade  even  would  be  this 
ten  dollars  advantage  to  each  man  over  not  trading.  If  either 
concealed  his  eagerness  and  detected  that  of  his  neighbor,  he 
might  get,  in  addition,  from  one  to  ten  dollars  direct  money 
payment  from  his  neighbor.  The  total  advantage  to  the 
shrewder  man  would  now  range  between  ten  and  twenty  dol- 


UTILITY,   VALUE,    AND   CONTRACTS  201 

lars,  while  the  advantage  of  the  other  would  still  be  some- 
thing, as  he  preferred  to  give  ten  dollars  rather  than  have  the 
trade  fail. 

It  will  be  seen  from  this  illustration  that  when  two  persons 
attempt   an    exchange,   two    valuations    are  made    by  each. 
First,  each  compares  his  own    possession  directly  with  the  /'  v 
other's  possession,  and  decides  which  is  the  more  valuable  to  /  ?/„  ;- 
him.     Second,  each  compares  the  two  possessions  from  the 
point  of  view  of  the  other,  and  tries  to  find  out  what  the  */  'y-^ 
other's  valuations  are.    By  the  direct  valuations  it  is  determined^-^T*"^^ 
whether  or  not  any  trade  at  all  can  take  place.     If  each  values 
his  own  possession  higher  than  that  of  the  other,  there  can  be 
no  trade.     If  each  values  the  other's  possession  higher  than 
his  own,  a  trade  can  take  place.     If  both  agree  upon  one  pos- 
session as  the  more  valuable,  there  can  be  no  trade.     If  a. 
trade  is  possible,  the  indirect  valuations  help  to  determine  how  i 
the  possible  advantages  from  the  trade  shall  be  shared  by  the  / 
two  men. 

Purchase  in  '^^  ^^^7  ^^^^  persous  is  mouey  desirable  for  its 
Money.  q^jj  sakc.  Miscrs  and  coin  collectors  are 
exceptions.  To  most,  money  is  desired  as  a  means  to  the 
enjoyment  of  various  forms  of  wealth  and  service.  In  a 
case,  therefore,  where  one  person  is  deliberating  whether 
or  not  to  buy  that  which  another  offers,  the  possible  buyer 
has  to  decide  by  his  direct  valuation  whether  the  sjiecial 
commodity  offered  is  more  valuable  to  him  than  some  other 
commodity  that  the  money  will  buy.  The  possible  seller  ■' 
likewise  decides  whether  the  commodity  he  offers  is  more  or 
less  valuable  to  him  than  some  other  commodity  which  he  can 
buy  with  the  money  to  be  received. 

When  money  is  exchanged  for  some  form  of 

Price.  ,   ,  .  ,  „  .  •  T 

wealth  or  service,  the  amount  of  money  is  said 
to  be  the  price  of  the  wealth,  or  service.  The  amount  of 
money  the  Ijuyer  is  willing  to  pay  rather  than  not  receive  the 
commodity  is  called  the  buyer's  price.  The  amount  of 
money  the  seller  is  willing  to  take  rather  than  not  part  with 


202       ELEMENTS  OF  ECONOMIC  THEORY 

the  commodity  is  called  the  seller's  price.  The  difference 
between  the  price  actually  received  and  the  seller's  price  is 
what  the  seller  gained  by  selling.  The  difference  between  the 
price  actually  paid  and  the  buyer's  price  is  what  the  buyer 
gained  by  buying. 

Suppositious    ^^^  *^6  case  of  the  two  farmers  mentioned,  we 
Made.         assumed  that:    (1)   each  was  seeking  his  own 
advantage   with  all    his  might;    (3)  the    conditions  of    the'; 
exchange  were  not  affected  by  the  opinions  of  others,  or  by] 
possible  trades  with  other  persons;,  (3)  each  man  was  free  to' 
j  trade  or  not,  as  he  chose.     How  far  are  these  suppositions 
!  true  in  actual  life? 

Seeking  One's  "^^  I'^alizc  that  cascs  cxist  whcre  exchangers  of 
Advantage  ^^^^^  ^''^^^^  ^^  ^^®  ntuiost  to  gain  as  much  as  pos- 
sible for  themselves,  you  have  only  to  remember 
the  cases  of  "higgling  over  a  penny"  which  you  have  seen,  your 
own  attempts  to  trade  tops,  Jackknives,  marbles,  etc.,  and  the 
rush  of  all  classes  of  people  to  supposed  "bargain  counters" 
and  "sacrifice  sales."  On  the  other  hand,  your  own  experi- 
ence will  doubtless  be  equally  convincing  respecting  the  exist- 
ence of  exchangers  who  seek  to  give  as  much  as  possible  in 
return  for  as  little  as  possible.  Mothers  and  fathers  give  lives 
of  service  to  their  chikken,  expecting  little  in  return;  public 
spirited  men  and  women  give  years  of  service  to  great  causes, 
to  the  welfare  of  the  community  as  a  whole,  and  to  the  poor 
and  unfortunate,  with  no  thought  of  pay;  and  boys  and  girls 
often  give  up  some  of  the  best  of  their  toys  and  dainties  to 
those  who  are  less  fortunate,  accepting  nothing  in  return,  or, 
at  most,  only  enough  to  make  the  other  person  feel  that  he 
has  not  received  a  gift  outright.  Many  exchanges  are  made 
between  friends,  neighbors,  and  persons,  one  of  whom,  in 
some  way,  has  an  advantage  over  the  other  which  he  is  unwill- 
ing to  push  to  its  utmost.  Thus,  it  must  be  remembered,! 
that  bargains  range  all  the  way  from  those  whore  each  partyl 
seeks  his  own  advantage  with  all  his  might,  to  those  where! 
one  or  both  parties  are  trying  to  give  the   greatest  possible  \ 


UTILITY,    VALUE,    AND   CONTRACTS  203 

value  for  the  smallest  possible  value.  The  typical  casein' 
economics,  however,  is  where  each  seeks  his  own  advantage. 
It  may  be  interesting  at  this  point  to  ask  ourselves  and  each 
other  how  many  cases  we  have  known  where  one  or  both 
parlies  did  not  seek  all  he  could  get.  '^'  '^ 

--  1.  (Jive  cases  known  to  you  where  persons  who  were  seek- 
ing for  a  house  paid  more  rent  than  was  asked. 

2.  Where  less  rent  was  taken  than  the  house-seeker  offered 
to  pay. 

3.  Give  similar  cases  for:  {a)  wages;  {h)  goods  purchased', 
in  a  store;  {c)  goods  purchased  of  an  acquaintance;  ((Z)  use 
of  land  for  a  building  or  for  cultivation;  (c)  services  of 
physicians,  lawyers,  teachers,  nurses,  etc.;  (/)  fares  upon  the 
railway  or  upon  a  boat;  {g)  tickets  to  a  concert  or  a  theatre, 
or  any  entertainment. 

4.  Give  reasons  for  the  unselfish  action  in  each  case. 

■  ■-■---.--■■■■■■"  ./'' 

5.  How  do  such  cases  compare  in  number  with  the  con- 
tracts where  each  person  tries  to  do  the  best  he  can  for  himself? 

G.  What  social  acts  of  men  can  you  think  of  that  are  not 
included  in  the  following  classification? 

fl.  Those  performed  under  compulsion,  £i2jiL- 

Q    .■  1   1             I  pulsory. 

i-         1      -j  2.  Those  by  which  men  make  contracts  with 

I  each  other,  contractual.                            f\ 

(_3.  Unselfish,  altruistic. 

7.  Give  illustrations  of  each. 

8.  Which  group  of  acts  more  nearly  coincides  with  the^ 
sphere  of  economics? 

0.  In  which  group  does  much  of  ^the  work  of  governments- 
lie?     Explain.    ^  t'^^-'^v^-'— ^    i^,   y^'-u.^     '--^' 

10.  How  many  of  the  groups  must  sociology  study?     Why? 
Possibly  Crusoe  and   Friday  sometimes    traded 

External  .         ''  .    -^ 

iniiuences  on  as  if  they  two  wcro  alouc  in  the  world,  although 

Trade.  *^ .  '  o 

the  valuations  which  each  made  were  even  then 
determined  somewhat  by  their  previous  associations  with  other 

'Pantaleoni,  "Yule  Review,"  May,  1808,  p.  95. 


<>a.. «  -y 


204       ELEMENTS  OF  ECONOMIC  THEORY 

men.  In  the  case  of  tlie  two  farmers  cited  above,  it  will  be 
noted  that  the  reason  why  one  man  wanted  more  cows  was  de- 
pendent upon  the  existence  of  his  customers.  In  actual  life  it 
(would  also  be  impossible  that  their  valuations  of  horses  and  cows 
[should  not  be  determined  somewhat  by  the  valuations  of  others 
in  that  vicinity.  Where  money  is  used  to  buy  a  commodity,  the 
mere  fact  of  the  existence  of  money  implies  a  lai'ge  number  of 
other  persons  who  are  willing  to  take  it  for  goods  of  various 
kiuds^^  JLt-is-the^>oweF  to-ggpresentf  goods  of  all  kinds  iDL,aII 
classes  of _^people_  that  makes  it  money.  Persons  know  in  a 
general  way,  often  precisely,  just  how  much  of  a  great  variety 
of  other  goods  they  can  get  for  the  money  they  decide  to  give 
for  the  one  they  buy.  Here,  then,  is  a  condition  of  bargain- 
ing that  needs  further  investigation.  How  are  general  or 
market  prices  of  goods  determined?  This  is  but  another 
form  of  the  second  general  question  of  this  chapter.  After 
the  freedom  of  persons  to  contract  as  they  choose  has  been 
discussed,  this  question  will  receive  definite  attention. 

All  the  legal  restrictions  upon  freedom  of  con- 
Limitations 
Upon  Freedom  tract  mentioned  and  suggested  m  Part  II  should 

of  Contract.  -r,        ,        .  .  .         , 

be  recalled  here.  Emphatic  mention  is  also 
made  of  the  fact  that  a  person  may  freely  choose  to  make  a 
certain  contract  which  gives  unusual  benefit  to  the  other 
party,  rather  than  make  no  contract  at  all,  simply  because  he 

'*^i^ '  ^■'  is  ignorant  of  the  values  which  men  in  general  put  upon  the 
commodities  exchanged,  and  also  because  he  is  so  situated 

"^kA  that  no  contract  means  great  loss,  suffering,  sometimes  even 
death,  to  him  and  those  dependent  on  him.  Instances  of  the 
former  are  numerous  among  uncivilized  people  who  accept  a  few 
trinkets  and  gewgaws  in  return  for  rare  furs,  ivory,  precious 
stones,  etc.  Forced  sales  of  real  estate,  houses,  furniture, 
etc.,  and  the  wage  contract  of  persons  who  must  sell  their 
services  to-day  or  starve  to-morrow  are  sadly  familiar  examples 
of  the  latter.  Igiiorance  _of  ,lhe  values  men  in  general  put 
> ''  upon  the  commodities  to  be  exchanged,  and  inability  to  with - 
f^j  hold  one's  commodity^rom  exchange  so  long  as  the  other 


UTILITY,   VALUE,   AND   CONTRACTS  205 


party  can  withhold  hia,  make  a  real  freedom  of  choice  in  con- 
tracting impossible. 

It  remains  to  show  how  the  value  schedules  of  a 

How  Social  or 

Market  Price  is  larffe  number  of  persons — each  value  schedule 

Determined. 

being  dependent  upon  the  two  factors,  absolute 
utility  and  quantity  of  each  commodity  already  in  the  pos- 
session of  the  maker  of  the  schedule — tend  to  determine  a 
social  or  market  price  for  each  commodity,  not  monopolized, 
which  is  generally  bought  and  sold.  Suppose,  for  example, 
that  ten  men  come  together  in  a  certain  place,  on  a  certain 
day,  and  that  each  has  a  horse  to  sell  at  not  less  than  the 
following  prices : 

will  sell  at  SISO.OOC^'^'^''"^^^'^^^-^' 
145.00 


A 
B 
C 
D 
E 
F 
G 
H 
I 


Vj 


140.00 

135.00 

130.00 

125.00^- 

120.00 

115.00 

110.00 

105.00 


(^ 


X, 


Suppose,  also,  that  there  were  present  at  the  same  time  and 
place  ten  possible  buyers  of  horses  who  will  pay  not  more  than 
the  following  prices : 

M  will  pay  $102.00 


J"*-*-^, 


i^^J. 


107.00t 

112.00 

117.00 

122.00  — 

127.00-—- 

132.00 

137.00 

142.00 

147.00 


206       ELEMENTS  OF  ECONOMIC  THEORY 

If  thore  were  practically  no  difference  in  the  horses  (an 
assumption  that  would  hold  true  in  the  case  of  stocks,  cereals, 
and  manufactured  goods  of  sta23le  grades  and  varieties),  one  of 
the  following  courses  would  probably  be  pursued:  either  those 
who  were  most  eager  to  sell  and  those  most  eager  to  buy 
would  first  find  each  other  out  and 

r     V  would  buy  of  J 
U       "  "I 

T        "  "  H 

S       "  "    G 

R       "  "    F 

leaving  the  sixth  man,  Q,  who  offers  only  $122,  unable  to  buy 
of  E,  who  asks  8130;  or,  by  what  is  termed  the  "higgling  of 
the  market,"  it  would  soon  be  found  out  that  a  certain  price! 
would  make  the  actual  buyers  and  sellers  equal  in  number,! 
and  all  the  trades  possible  would  be  made  at  that  price.  In 
the  latter  case,  if  horses  were  sold  at  above  6127,  there  would 
be  only  four  persons  ready  to  buy,  and  at  least  five  ready  to 
sell;  and  if  the  price  were  put  below  $125,  there  would  be 
only  four  sellers  and  at  least  five  buyers ;  but,  if  somewhere 
between  $125  and  $127,  there  would  be  five  buyers  and  five 
sellers,  the  same  number  as  in  the  first  case.  By  this  last 
method  of  determining  market  price,  the  report  would  be  that 
horses  sold  at,  say,  $126,  surely  at  a  figure  between  $125  and 
$127.  By  the  first  method,  also,  if  each  pair  of  traders  suc-l 
ceeded  in  dividing  the  advantage  of  their  trade  evenly  botweenj 
I  them,  each  trade  would  take  place  at  $126,  For  example, 
i  V,  who  buys  of  J,  and  would  have  paid  $147,  gains  $21  by 
buying  at  $126,  and  J,  who  would  have  sold  at  $105,  gains  an 
equal  amount  by  selling  at  $126.  So,  likewise,  with  each  pair 
in  turn,  and  when  we  come  to  R,  who  will  pay  only  $127,  and 
F,  who  will  not  sell  for  less  than  $125,  there  is  only  a  possible 
two  dollars  to  gain  by  the  trade,  even  if  it  all  goes  to  one 
man.  Therefore,  by  the  first  method  of  trading,  as  well  as  by 
the  second,  the  last  trade  must  have  been  between  $125  and 


i^JtJL 


UTILITY,   VALUE,    AND   CONTRACTS  207 

6127.  Some  political  economists  call  K  a  marginal  buyer  and 
F  a  marginal  seller,  one  being  very  near  the  point  of  refusing 
to  buy,  and  the  other  almost  ready  to  refuse  to  sell.  It  will 
be  found  that  market  price  always  lies  between  the  very 
narrowjimits  of  TnarginaThnjers'  prices  and  marginal  sellers'  ^ 
prices.  . 
/''''Exercises— 1.  Try  to  make  a  diagram  of  the  buyers  and 
sellers  of  horses  nsed  as  an  illustration  on  page  205,  which 
will  show  in  graphic  form :  ^^^tEit^t^^  /^^^^^e^-^^'  U-M 

a.  All  the  successful  bnyers'  prices.      v?>i^t*c<Xc  .^.l^  /j-  ^^-t^j^.^  e^ 

1).  All  the  successful  sellers'  prices.         *2^-^x«-.^, 

c.  All  the  unsuccessful  buyers'  prices. 

d.  All  the  unsuccessful  sellers'   prices. 

e.  How  much  each  successful  buyer  and  seller  gains  if  all 
horses  sold  at  8120. 

/.  How  much  each  man  who  failed  to  sell  or  buy  would 
have  lost  by  buying  or  selling  at  S12G. 

2.  Assign  a  different  series  of  sellers'  prices  from  those 
given,  leaving  the  buyers'  prices  as  they  are,  and  find  out  the 
market  price  that  would  be  established. 

3.  Change  the  buyers'  prices,  leaving  the  sellers'  prices  as 
they  are,  and  find  out  the  market  price  that  would  be 
established. 

4.  Change  both  sets  of  prices  and  work  out  the  market 
price  established  under  those  conditions. 

The  intending  buyers  who  would  not  pay  so  much  and  the 
intending  sellers  Avho  would  not  sell  so  low  would  be  com- 
l)elled  to  wait  for  another  day,  one  group  waiting  for  a  higher 
price  and  the  other  group  waiting  for  a  lower  price. 

Thus  it  is  seen  that  a  meeting  of  persons  wishing  to  buy  at 
various  prices,  with  other  persons  wishing  to  sell  at  various 
prices,  would  tend,  on  the  first  day  of  meeting,  to  establish  a 
social  or  market  price,  at  which  the  greatest  possible  number 
of  sales  could  take  place.  If  the  meeting  of  intending  buyers./^ 
and  sellers  of  horses  should  continue  on  succeeding  days,  the 
presence  of  a  large  number  of  men  willing  to  sell  at,  or  below, 


20S       ELEMENTS  OF  ECONOMIC  THEORY 

the  market  price  of  the  day  before,  and  the  presence  of  only  a 
small  number  of  men  willing  to  pay  as  high  as  that  market 
price,  would  tend  to  lower  the  first  day's  market  price.  On 
the  other  hand,  the  presence  of  a  large  number  of  men  ready 
to  pay  higher,  and  of  a  small  number  of  men  ready  to  sell 
so  low,  would  tend  to  raise  the  first  day's  market  price. 

,      A  formal  answer  to  the  second  question  asked  on  page  193 

may  now  be  given.     Individuals  arrange  value  schedules  based 

\^/>i^,t£   h^pon  the  absolute  utilities  of  commodities  an^the  amounts  of 

\  thjem_alr eady  available  for  the  satisfaction  of  their  wants^  So 
far  as  the  different  commodities  of  these  schedules  are 
definitely  compared  with  each  other,  the  comparison  is  made 
in  money,  that  is,  they  are  given  different  prices.  Groups  of 
possible  buyers  of  one  commodity,  with  their  different  buyers' 
prices,  are  in  daily  contact  with  groups  of  possible  sellers, 
with  their  different  sellers'  prices.  A  market  price  results| 
which,  in  general,  allows  the  maximum  number  of  salesf 
Whenever  new  buyers  or  new  sellers,  in  relatively  great  num- 
bers, appear  with  new  buyers'  and  sellers'  prices,  or  the  old 
buyers  and  sellers  materially  change  their  prices,  a  new  mar- 
ket price  may  be  formed,  which  may  later,  in  its  turn,  give 
way  to  another  market  price.  The  social  or  market  prices  of 
different  commodities  determine  the  amount  of  one  com- 
modity that  may  be  exchanged  for  a  definite  amount  of 
another  commodity  in  a  certain  market  at  a  certain  time. 
Different  Com-  "^^^  ^^^®  *^^  *^^®  market  which  within  certain 
"^'oiffere^*^*  limits  "fixcs  the  market  price"  of  retail  groceries, 
Markets.  fpuits,  ctc,  may  be  only  a  few  stores  witli  the 
people  who  trade  in  them.  Sometimes  one  retail  store  with 
its  customers  forms  such  a  market.  On  the  other  hand,  the 
market  for  wheat  is  composed  of  buyers  and  sellers  in  the 
whole  civilized  world,  and  they  are  kept  in  electric  touch 
with  each  other  by  means  of  the  telegraph  and  cable.  So 
sensitive  is  this  market  to  the  influence  of  the  quantity  factor 
in  the  valuation  of  persons,  that  an  abundant  rain,  after  a 
drouth  in  a  great  wheat  raising  region,  lowers  the  prices  mar- 


UTILITY,   VALUE,    AND  CONTRACTS  209 

ginal  buyers  will  offer  for  wheat  to  be  delivered  about  the  time 
the  crop  affected  by  the  rain  can  be  marketed.  These  lowered 
buyers'  prices  may  lower  the  market  price  of  wheat  all  over 
the  world. 

Deni    d       ^^  ^^  commouly  said  that  the  market  price  of 

and  Supply,  anything  depeuds  u^Jon  demand  and  supply. 
These  words  are  indeed  convenient  names  for  very  complex 
groups  of  conditions  and  forces  on  each  side  of  any  given  con- 
tract. The  danger  is  that  wo  shall  come  to  use  these  words 
with  a  show  of  knowledge  when  we  are  in  reality  profoundly 
ignorant  about  the  facts  behind  either  of  them.  For  example, 
demand  and  supply  might  be  said  to  have  fixed  the  market 
price  of  horses  in  the  illustration  we  have  used,  but  what  was 
really  present  on  each  side  was  a  group  of  active:jiiiKled  men, 
ibout  each  of  whom  we  know  very  little.  Suppose  those  who 
aad  horses  to  sell  are  represented  on  the  supply  side  of  the 
following  diagram,  and  that,  in  general,  an  increase  of 
pressure — supply — on  this  side  tends  to  lower  the  market 
price  of  horses. 

Suppose,  also,  that  intending  buyers  are  placed  on  the 
demand  side,  and  increase  here  tends  to  raise  the  market  price 
of  horses. 

In  this  case,  supply  is  furnished  by  ten  men,  who  have 
various  degrees  of  eagerness  to  dispose  of  their  horses.  The 
eagerness  of  each  man  to  sell,  or  his  valuation  of  his  horse  in 
terms  of  money,  is  dependent  upon  the  absolute  utility  of 
horses  to  him  and  the  number  of  them  already  at  his  disposal. 

On  the  demand  side,  are  ten  other  men  whose  valuations 
have  been  made  up  in  a  similar  way. 

Now,  anything  that  changes  the  horse  valuation  of  any  one 
of  these  twenty  men,  especially  the  ones  whom  we  have  called 
■narginal,  tends  to  change  the  social  valuation  or  market 
j)rice  of  horses, — market  price  being  social  valuation  expressed 
in_mouey.  But  the  cause  for  any  one  person's  valnationi 
comes,  as  we  have  seen,  through  a  change  in  its  absolute 
utility  to  him  or  through  a  change  of  quantity.     Therefore,  it 


310 


ELEMENTS  OF  ECONOMIC  THEORY 


3 


N 


ffl 


O 


z  "^ 

0) 

a 

OS 

t>1 

P^ 

CO 

IS 

1) 

a 

O 

f2    > 

•^    a 

^ 

^ 

a 

o 

PQ 

"go 

c3 

^ 

O 

u 

-4 

cS 

.2 

^ 
n 

^ 

0 

5  ^ 

C3 

'5 

0) 

tc 

ctf 

o 

O 

w 


o 


PI  H-l 


I  I  I 


1-1  o 


J 


^; 


"^ 


^^^ 


^ 


<D 

O 

0) 

!^ 

r/1 

•"^ 

O 

O 

-1-3 

01 

^ 

c> 

^ 

b! 

€0 

r^ 

sw 

S 

O 

UTILITY,   VALUE,    AND   CONTRACTS  211 

is  evident  that  anytlnng  which  changes  either  one  of  these 
factors  in  the  vahiation  of  one  or  more  men  on  the  supply 
side,  or  the  demand  side,  tends  to  change  the  market  price. 

Furthermore,  the  causes  for  any  person's  valuation  may  be 
individual,  such  as  affect  him  alone;  or  social,  such  as  affect 
many,  perhaps  all,  at  the  same  time. 

Demand  and  supply,  then,  are,  by  themselves,  of  little  real 
use  in  explaining  why  the  market  j^rice  of  horses,  or  of  any- 
thing else,  goes  up  or  down.  To  say  that  the  market  price  of 
anything  is  dependent  upon  demand  and  supply  is  no  more  an 
explanation  of  changes  in  price  than  the  statement  that  the 
mercury  of  a  thermometer  is  dependent  upon  heat  and  cold  is 
an  explanation  of  the  temperature  of  a  given  place.  True, 
the  mercury  does  go  up  and  down  with  variations  in 
temperature,  but  the  causes  of  change  in  the  temperature  at  a 
given  place  lie  back  of  the  mere  words  heat  and  cold,  among 
the  complex  j^henomena  of  radiation,  direction  of  the  wind, 
degree  of  moisture  of  the  atmosphere,  etc.  So  the  real  forces 
in  determining  market  price  are  back  of  the  mere  words 
demand  and  supply,  among  the  complex  conditions  and  causes 
that  are  affecting  the  valuations  of  one  or  more  individuals. 
These  words  are  easily  used,  but  to  trace  the  forces  back  of 
demand  and  supply,  to  their  sources,  is  the  work  of  trained 
men  and  women.  /r^^UA.'^a.^iy q^ 

An  attempt  to  answer  the  following  questions  may  aid  ^ovcdop/^^f^ 
to  see  the  truth  of  these  statements  a  little  more  clearly :  ^^^^^/^ 

1.  In  respect  to  the  market  price  of  horses  in  the  illustra- jj:^^^-^ 
tioD  given,  think  out  some  change  in  market  price  on  the  day  | 
described  which  might  have  resulted  from  a  change  in  one  I' 
man's  valuation. 

2.  Think  out  some  change  in  the  utility  of  horses  to  him,/  > 
or  in  the  number  of  them  already  possessed  by  him,  whichf 
might   have   caused  this   difference  in  his    valuation.     Thislf 
may  be  called  an  individual  cause  for  change  in  market  price. 

3.  Think  out  similarly  some   social    causes   which    mit;lit[ 
have  made  the  market  price  much  different  from  what  it  was.) 


212 


ELEMENTS  OF  ECONOMIC  THEORY 


Ai"    i 


a. 


4.  Think  of  all  the  buyers  of  horses  in  your  section  of  the 
country  as  taking  the  places  of  the  ten  buyers  in  the  illustra- 
tion, and  of  all  the  sellers  of  horses,  the  places  of  the  ten  sellers. 
What  would  be  the  tendency  of  each  of  the  following  causes 
upon  the  market  price  of  horses?  State  also,  for  each  cause, 
whether  it  is  individual  or  social. 

Good  bicycles  fall  in    price  from    one    hundred 

dollars  to  thirty-five  dollars.     Give  reasons. 
t.  Suppose  people  who  "are  somebody"  give  it  out 

that  only  those  who  own  an  automobile  can  go  in 

their  "set."     Give  reasons.       ^^ 

c.  The  belief  becomes  general  that  bicycle  riding  is 
unhealthful.     Explain.    ,— 

d.  A  horse  breeder  dies,  and  his  horses  are  sold  at 
auction.     Explain. 

e.  A  horse  epidemic  breaks  out  which  carries  away 
half  the  horses.     Explain. 

f.  A  tax  of  ten  dollars  is  levied  on  every  horse  in  the 
country.     Explain. 

g.  War  breaks  out,  and  the  government  buys  10,000 
horses  for  the  army.     Explain.  — 

h.  A  great  railway  is  to  be  built,  and  the  contractors 

buy  up  10,000  mules. 
i.  A  dozen  rich  men  fall  ill,  and  their  doctors  pre- 
scribe daily  horseback  riding.    — -- 
Show  that  the  diagram  may  be  so  modified  as  to  illustrate 


Xyfy 


the  directions  from  which  influences  stream  in  that  tend  to 
^^  raise  and  lower  the  market  price  of  wheat,  corn,  gold  and 

u^ I^  silver  bullion,  any  form  of  wealth.     Are  there  marginal  buyers 
and  sellers  in  each  of  these  cases? 

G.  Show  that  it  may  be  so  modified  as  to  illustrate  similarly 
for  the  wages  of  carpenters,  servant  girls,  or  payment  of  any 
kind  of  service  that  is  regularly  sold. 

7.  Is  the  diagram  given,  where  only  twenty  men  are  sup- 
posed to  be  concerned,  more  or  less  simple  than  a  diagram  for 
wheat?  for  gold  and  silver?  for  wages?    Why? 


4u^  c 


UTILITY,   VALUE,   AND  CONTRACTS  213 

8.  Does  the  fact  that  you  see  the  directions  from  which 
influences  come  to  raise  and  lower  market  price  give  you  full 
information  about  the  number  and  force  of  these  influences? 
Why? 

9.  The  market  price  of  labor  is  high  in  America.  Is  thisj^L^o^^ 
fact  fully  explained  when, it  is  said  demand  and  supply  make/ 

it  sft'-  whj^^.  I  ^  l.:..-u^  '-  dOM.^^^-^^^  ^  -^ 

10.  ]\Iention  some  causes  which  men  give  for  high  'wages.t'/*^  ^ 
Are  these  the  only  causes?  Do  any  of  these  iissigned  causes  con- ]  yiuy^'^^. 
flict?    Which  is  right?     Do  you  understand  the  whole  matter?      "^y^ 

11.  A  given  weight  of  gold  will  buy  much  more  silver  now, 
the  world  over,  than  twenty  years  ago.  Is  it  enough  to  say 
that  demand  and  supply  have  caused  this?/  -Why?  '%^<'^  -'>^^^'  '■''  ■ 

12.  Show  that  the  utility  of  these  metals  as  money  is  increased 
and  decreased  for  individuals  by  the  action  of  governments. 

13.  If,  in  some  way,  any  article  comes  to  serve  additional 
wants  for  people  in  general,  how  would  these  persons  tend  to 
value  the  article?     Explain.       ;    ••       -  ^v   ..  '--^    ;■  "v  ^c-c-"*^-^  J 

14.  Would  the  reverse  be  true?     Explain.^ 

—1:5.  Show  that  society,  through  legislation,  can  make  so 
many  individuals  change  their  valuations  of  a  commodity  as 
to  change  its  market  value  or  price.     Give  examples. 

16.  Show  that  society,  through  fashion,  can  do  the  same 
thing.     Give  examples. 

->17.   Show  that  monopolists  of  all  sorts,  men  Avho  "corner 
the  market,"  and  otliers  who  in  any  way  control  the  quantity,  •''  ^"' 
of  a  commodity,  can  so  change  the  quantity  of  it  accessible  to|*"  '  '^' 
individuals  that  their  valuations  of  it  are  raised  or  lowered,) 
within  limits,  at  the  will  of  the  monopolists. 
^    18.  ]\Iake  out  a  list  of  the  commodities  used  in  your  family 
the  quantity  of  which  is  supposed  to  be  monopolized. 

19.  What  bearing  does  the  fact  of  a  monojioly  have  upon 
the  method  described  above,  of  determining  market  price?      ' 

20.  If  a  commodity  is  fully  monopolized,  so  that  the  quan- 
tity of  it  accessible  to  the  public  is  perfectly  controlled,  how 
high  a  price  can  the  public  bo  made  to  pay  for  it?     Explain. 


314       ELEMENTS  OF  ECONOMIC  THEORY 

^'  .^  21.  Ask  the  above  question  about  different  specific  com- 
modities, as  gas,  city  water,  fare  on  street  railways,  beef, 
.pianos,  services  of  a  doctor,  boots  and  shoes,  land,  etc. 
^  22.  What  alternative  do  the  peojile  have  if  the  market  price 
is  put  higher  and  higher?  What  might  happen  if  all  articles 
of  food  were  monopolized?  .  . 

1-  /  23.  If  you  were  a  monopolist,  in  absolute  control  of  a  com- 
modity, and  wished  to  "make"  as  much  as  possible  out  of  it, 
show  that  it  might  be  best  for  you  to  keep  the  price  low. 

24.  Criticize  this  formula  for  such  a  purpose : 
X  =  cost  of  one  unit  of  commodity. 

y  =  selling  price  or  market  price  of  one  unit  of  com- 
modity, 
n  =  number  sold, 
(y  — x)n  =  maximum. 
If  the  difference  between  y  and  x  is  very  small,  as  it  would 
be  if  the  selling  jDrice  were  low,  how  can  {y-x)n  be  greater 
than  (y-x)n  when  the  difference  between  y  and  x  is  great? 
Give  example  of  this. 

25.  Which  are  of  more  effect  in  causing  changes  in  market 
price — social  causes  or  individual  causes?     Why? 

26.  Give  several  examples  from  industrial  history  of  great 
i„^^uf   changes  in  the  market  price.     What  were  some  of  the  causes 

'^"'  in  each  case?  . 

27.  Why  do  men  disagree  as  to  the  effect  of  tariffs  on 
wages  and  prices  in  the  United  States?  Are  you  ready  to  set 
them  right?     Why? 

28.  Why  do  men  disagree  as  to  the  causes  of  the  fall  in 
market  prices  of  silver  in  the  past  twenty  years?  Are  you 
ready  to  set  them  right?  Are  you  satisfied  merely  to  say  that 
demand  and  ^npply  have  caused  these  falling  prices?     Why? 

The  fundamental  importance  of  this  necessarily 
canceofThis  somcwhat  technical  discussion  of  utilitv,  value. 

Chapter.  .  j  t  ■> 

price,  and  contracts,  appears  when  it  is  remem- 
bered that  in  the  civilized  world  of  to-day,  as  never  before, 
men  are  satisfying  their  wants  by  producing  utilities  of  service 


UTILITY,   VALUE,  AND   CONTRACTS  215 

and  wealth  for  other  people,  in  return  for  which  they  must 
receive,  if  they  are  to  get  them  at  all,  the  services  and  wealth 
which  are  to  satisfy  their  own  wants. 

Its  importance  should  stand  out  in  still  clearer  relief  when 
it  is  further  remembered  that  all  these  exchanges  are  now 
made  Jess  at  customary  and  traditional  rates  and  more  by 
contracts,  which  are  subject  only  to  the  economic  forces  acting 
at_the  time_upon  the  two  contracting  parties  than  has  been 
true  in  past  centuries.  UiDon  the  valuations  of  the  two  parties 
to  the  contract  and  upon  the  resultants  of  many  similar  valua- 
tions as  expressed  in  market  prices,  depend  in  general  all  con- 
tracts between  wage-worker  and  emi^loyer  for  wages,  between 
borrower  and  lender  for  interest,  between  tenant  and  landlord 
for  rent,  and  between  buyer  and  seller  for  purchase  price. 
Upon  one  side  or  the  other  of  one  or  more  of  these  contracts 
every  adult  person  continually  finds  himself.  Upon  the  issue 
of  his  contracts  depend,  to  a  great  degree,  his  own  economic 
welfare  and  that  of  those  dependent  upon  him.  All  indus- 
trial struggles  center  about  the  two  elements  of  value — utility 
and  quantity  of  the  commodity  concerned.  Any  person  or 
combination  of  persons  that  can  better  the  quality  of  a  com- 
modity or  decrease  the  quantity  of  it  accessible  to  others  tends 
thereby  to  increase  its  value  to  others.  From  this  point  of 
view,  trade  unions,  trusts,  monopolies,  legislation,  strikes, 
etc.,  may  be  profitably  studied. 


216  ELEMENTS  OF  ECONOMIC  THEORY 


Chapter  II 

PRODUCTION 

ManandHis    ^^^^^  ^^^  ^^^    liome  on  the  outside  of  a  huge 

Home.        hsiW,  rotating,  revolving,  and  careering  through 

infinite  space,  accompanied  by  its  companion  spheres.    From 

the  surface  of  this  ball,  from  a  relatively  thin  layer  of  air 

about  it,  from  a  few  holes  dug  a  little  way  below  the  surface, 

from  the  fish  he  takes  from  its  waters,  and  from  the  various 

forms  of  energy  which  stream  toward  him  from  out  the  infinite 

star-depths,  must  come  whatever  is  to  minister  to  his  wants 

through  the  medium  of  his  senses.     AVhatever  earth  and  the 

/universe  of  suns  besides  contribute  of  wild  fruits,  shelter  of 

I  forests,  ozone  of  atmosphere,  inspiration  of  cloud,  and  warmth 

.'of  sunlight   is  so  much  utility  furnished  him   gratuitously. 

All  other  satisfactions  of  want  which  he  is  to  obtain  must  be 

secured  through  his  own  modification  of  his  environment,  or 

by  a  modification  of  himself.    Only  the  blindness  of  man  kept 

him  for  unknown  ages  ignorant  of  the  fact  that  the  seemingly 

barren  surface  of  the  earth  and  the  empty  space  about  him  were 

stored  Avith  possibilities  of  food,  clothing,  shelter,  and  motion 

for   his  use  so   soon  as    he  should  open   his   eyes   to   their 

presence. 

Slowly  has  he  learned  how  to  make  for  himself _tqols,  with 
which  to  strike  down  at  a  distance  animals  suitable  for  food, 
and  with  which  also  to  protect  himself  against  men  and 
other  animals.  Some  unknown  Prometheus  among  men 
taught  him  tiie  utility  of  fii'e.  With  what  ignorance  of  chem- 
istry and  the  laws  of  life  and  growth  has  he  scratched  the 
surface  of  the  earth  and  scattered  seed  for  scanty  harvests ! 
How  painfully  and  slowly  has  he,  through  all  the  ages  until 
our  own,  crawled  from  place  to  place  on  foot,  or  mounted  on 


PRODUCTION  217 

some  beast  scarcely  stronger  than  himself!  All  that  man  has 
wrought  in  developing  the  quality  and  infinite  variety  of  his 
articles  of  food,  dress,  and  shelter;  all  the  services  that  he 
has  learned  how  to  perform ;  all  the  knowledge  he  has  gained 
about  his  environment,  himself,  his  origin,  and  his  probable 
destiny,  all  these  achievements  and  more  are  included  in  the 
complete  story  of  man's  efforts  to^satisfy  liis  .wants  directlj 
from  nature,  or  by  some  modification  of  the  materials  and 
endowment  furnished  him  by  nature.  From  the  objective 
and  economic  points  of  view,  all  that  man  has  achieved, 
from  the  age  when  he  wielded  only  rude  stone  implements 
and  lived,  soul  and  body,  in  caves,  to  the  present  moment, 
when  he,  like  Jove,  makes  the  universe  his  home  and 
literally  holds  the  thunderbolt  in  his  hand,  has  been  done  by\ 
him  to  satisfy  the  impulses  and  cravings  of  his  own  developing 
nature — to  produce  actual  or_potential  utility. 

The  primary  elements  in  satisfaction  of  want  are  man  and 
his  natural  environment,  man  and  that-which-is-not-man. 
To  produce,  in  an  economic  sense,  is  so  to  modify  environ- 
ment by  human  effort  as  to  make  it  more  satisfactory  to  man. 
Formulae  of  "^^^  i%xva  natuxaLxfismirces  will  be  used  here  as 
Production,  ^j^q  equivalent  of  envh'onment  and  it  must  be 
remembered  that  both  materials  and  forces  are  included, 
^fany  writers  also  use  the  word  land  in  this  broad  sense. 
Some  important  differences  in  the  conditions  of  produc- 
tion may  be  shown  by  modifications  of  the  equation  given 
in  Part  I. 

(7  1.  Man  +  natural  resources  =  utility.  Expressed  entirely 
in  words  this  equation  might  read  as  follows:  man  uses 
natural  r&sources  to  satisfy  his  want.  This  is  the  simjilest 
possible  form  of  production.  Mail  has  always  used  the  sun- 
light to  give  himself  warmth,  and  wild  fruits  to  satisfy  his 
hunger,  A  case  where  man  puts  forth  more  effort  than  in 
the  above  acts  would  l^e  that  of  a  savage  who  scales  a  cliff,  or 
climbs  a  tree,  for  the  eggs  and  young  of  birds.  Still,  the  most 
difficult  forms  of  production,  according  to  this  formula,  are 


218       ELEMENTS  OF  ECONOMIC  THEORY 

little  more  than  mere  appropriation  of  nature's  bounties. 
Even  the  most  primitive  races  of  men  do  not,  as  a  rule,  satisfy 
their  wants  so  directly.  Siiclss  of  special  forms  and  stones  of 
certain  shapes  with  which  to  strike  down  animals,  two  stones, 
one  hollowed  and  one  rounded,  for  crushing  gi'ain,  a  bow  and 
arrows  with  which  to  strike  a  blow  at  a  distance,  snares  for 
unwary  birds,  and  thongs  of  rawhide  and  ropes  of  twisted 
grasses  with  which  to  subdue  and  harness  animals,  are  familiar 
illustrations  of  articles  which  even  primitive  man  has  fash- 
ioned from  the  materials  furnished  by  nature,  not  because 
these  articles  of  themselves  satisfied  his  wants,  but  because 
])y  their  aid  he  could  procure  more  food,  clothing,  shelter, 
means  of  adornment,  and  culture.  All  goods  desired  for  the] 
(y  I J  immediate  satisfaction  of  want,  we  may  call  consumption  goods] 
or  goods  of  the  fii'st  order. ^  The  goods  desired  because,  by  their 
\  "?  aid,  more  consumption  goods  can  be  obtained,  may  be  called 
goods  of  the  second  order.  Goods  desired  because,  by  their 
aid,  goods  of  the  second  order  may  be  secured,  may  be  called 
goods  of  the  third  order,  and  so  on,  Man  has  combined  his 
own  efforts  with  natural  resources  to  produce  tools  and 
machinery,  machines  to  make  machines,  and  still  other 
machines  to  make  machine-making  machinery,  in  order  that, 
/f  by  the  aid  of  different  forms  of  this  third  and  derivative  factor 
^'"'  in  production,  commonly  called  capital,  he  might  use  his 
energies  upon  natural  resources  to  better  effect,  in  the  produc- 
tion of  consumption  goods.  From  the  sharpened  stick  to  the 
steam-driven  gang  plough,  from  the  distaff  to  the  modern 
factory,  from  the  canoe  and  the  two-wheeled  ox-cart  to  the 
modern  steamship  and  the  transcontinental  railway,  man  has 
invented,  discovered,  developed,  and  accumulated  tools, 
machinery,  buildings,  appliances,  chemical  formulas,  and 
libraries  of  human  experience,  that  he  might  wield  all  these 
things  as  instruments  in  his  assaults  upon  nature  for  a  greater 
variety  and  quantity  of  consumption  goods. 

^Marshall,  Principles  of  Economics,  vol  I,  p.  115. 


PRODUCTION  219 

For  most  of  the  production  iu  the  world  since  man  became 
man,  the  following  formula  mnst,  therefore,  be  substituted  for 
the  first : 

2.  Man  +  capital  +  natural  resources  =  utility.  Man  uses 
capital  to  help  him  to  modify  nature  so  as  to  satisfy  his  wants. 

But  even  this  formula  needs  farther  modification  in  order 
to  express  the  whole  truth.  An  isolated  man,  like  Crusoe 
lief  ore  Friday  came,  might  satisfy  his  wants  according  to  this 
formula.  A  man  in  a  civilized  land,  or  anywhere  in  a  com- 
munity of  his  fellows,  can  rarely  do  so.  Even  among  savages 
there  are  fairly  w^lLdefinad-nsilgfiS.  in  accordance  with  which 
men  hunt,  wage  war,  pasture  flocks,  and  reap  scanty  harvests 
of  grain.  In  England  and  the  United  States,  as  we  have 
already  seen,  some  of  the  social  conditions  which  have  regu- 
lated the  productive  activities  of  men  have  been  variously 
formulated  by  kings,  lords,  gilds,  parliaments,  congresses, 
voluntary  agreements  of  many  sorts,  and  even  international 
treaties.  Man  is  a  social  animal,  and  can  not  live  to  himself 
if  he  would.  Groups  of  men,  through  usage,  custom,  public 
opinion,  ethical  ideals,  and  law,  have  always  had  a  great 
influence  over  individual  industries.  In  short,  society^  has 
always  devised  some  form  of  control  and  compulsion  of  the 
individual  who  tries  to  make  his  will  the  supreme  law.  A  third 
formula  is,  therefore,  necessary. 

3.  Society  +  man  +  capital  +  natural  resources  =  utility. 
In  subordination  to  the  usages,  customs,  and  laws  of  the 
country  in  which  he  lives,  man  uses  capital  to  help  him  to 
modify  nature  so  as  to  satisfy  his  wants. 

Mention  has  been  made,  in  Fart  II,  of  some  of  the  political 
changes  that  have  taken  place  in  the  social  regulations  of 
production  in  England  and  the  United  States.  Many  of  these 
regulations  have  not  proved  permanent.  Unless  tlie  opinions 
of  American  voters  remain  the  same  from  year  to  year,  these 
regulations  may  change  annually  in  some  of  our  states. 
Taking  the  country  as  a  wliole,  they  will,  without  a  doubt, 
become  in  a  decade  greatly  different  from  what  they  are  now. 


220       ELEMENTS  OF  ECONOMIC  THEORY 

Suggestive     ^'  ^^^^  some  of  the  most  important  bills  now 
Questions,     proposed  and  laws  already  enacted  in  your  state 
which  have  directly  to  do  with  the  ways  by  which  individnals 
get  a  living.  ijf^ 

'^TA^iA^       2.  What  restrictions  do  they  place  njDon  individuals?    Why?<JM 
^^-d-<—  /   3.  What  sjiecial  privileges  do  they  give  natural  and  legal  ■ '' 
-^X^     f  P9f spns  which  make  it  easier  for  them  to  get  a  living?     Why? 
vjL^x^^'-  4.  In  case  special  privileges  are  given,  is  it  supposed  that 
■''  the  persons  to  whom  they  are  given  will  perform  for  society,/ 

in  return,  certain  services,  or  produce  certain  utilities?  How 
is  this  side  of  the  contract  kept?  Why?  Is  the  contract  a 
fair  one  to  both  sides?     How  do  you  know? 

5.  Look  up  some  of  the  recent  national  laws  and  decisions 
of  the  United  States  Supreme  Court  ^  which  bear  directly 
upon  the  methods  by  which  persons  are  getting  a  living.  Are 
any  of  them  of  much  importance  to  you?  Why? 
Variation  in  ^^  ^®  ^^°^  ^^  ^^^®  formula,  society  +  man  + 
*Qu^uf 'o'f^  capital  +  natural  resources  =  utility,  as  an 
utilities.  equation,  it  is  evident  at  once  that  changes  in 
any  one,  or  more,  of  the  four  factors  in  the  first  member  of  the 
equation  must  tend  to  produce  similar  changes  in  the  second 
member.  In  general  it  may  be  said  that  utilities  are  increased 
in  number  and  improved  in  quality  by  one  or  more  of  the 
following  causes :  by  wiser  and  more  Justly  administered  social 
regulations ;  by  everything  that  improves  the  physique,  adds 
to  the  mental  equipment,  raises  the  moral  standards,  and 
enlists  more  completely  the  productive  energies  of  man ;  by 
every  substitution  of  a  more  efficient  for  a  less  efficient  form 
of  capital ;  and  by  the  discovery  and  apjoropriation  of  richer 
and  more  varied  natural  resources.  An  intelligent  comparison 
of  one  period  of  the  world  with  another,  or  a  comparison  of 
one  period  of  a  single  country  with  another  period,  in  all  these 
particulars,   would  not   fail  to  reveal  much  concerning  the 

'Stimson.  Read  also  Kelley,  The  United  States  Supreme  Court 
and  the  Utah  Eight  -  Hour  Laio — "The  American  Journal  of  Soci- 
ology," July,  1898. 


PRODUCTION  221 

relative  quantities  of  goods  enjoyed  by  the  people  of  the  two 
periods.  Compaied  in  this  way,  the  economic  snperiority  of 
the  England  of  to-day  over  the  England  of  Xorman  times, 
and  the  superiority  of  the  United  States  of  the  present 
time  over  the  thu'teen  colonies,  is  quickly  apparent.  The 
facts  given  in  Part  II  afford  a  partial  basis  for  such  com- 
parisons. 

[XoTE. — It  will  be  seen  later  that,  on  account  of  the  gi-eat 
diiference  between  utility  and  value,  the  statement,  suggested 
above,  that  the  people  of  a  single  business  or  nation  will  be 
economically  well  off  provided  they  succeed  in  producing  a 
great  quantity  of  utilities,  needs  modification.  While  literally 
true  for  the  world,  it  is  not  necessarily  true  for  a  nation  and 
still  less  so  for  a  single  business.  So  far  as  any  business 
or  nation  disposes  of  a  surplus  of  its  products  for  other  products, 
it  wants  as  great  a  value  as  possible,  not  merely  an  abundance 
of  utility. 

Of  course,  the  only  actor  in  all  production  is  man — man  as 
grouped  in  all  sorts  of  ways  and  called  in  our  formula  society ; 
man  as  undertaker  and  directed  worker  of  each  special  busi- 
ness; man  as  an  owner  of  capital;  man  as  an  owner  of 
natural  resources.  Now,  it  makes  a  great  deal  of  difference 
to  men  what  results  they  expect  from  their  efforts.  There- 
fore, the  energies  of  men,  their  courage,  perseverance,  hon- 
esty, and  even  their  physical  strength,  considered  as  producers, 
depend,  to  a  gi'eat  degree,  upon  the  size  of  their  share  in  the 
product  of  industry — in  other  words,  upon  what  pay  they  get 
for  their  various  efforts.  It  is  this  problem  of  sharing  the5 
product  which  is  called  by  economic  writers  "distribution."] 
To  a  discussion  of  distribution,  a  separate  chapter  will  be  given, 
Ijut  mention  is  made  of  it  here  in  order  to  suggest  the  fact  I 
that  no  one  can  fully  discuss  or  understand  how  the  produc- 
tion of  utilities  increjises  and  diminishes  without  taking  into 
account  also  the  facts  of  their  division  among  the  producers — 
distribution.  These  two  processes  continually  react  one  upon 
the  other.] 


223 


ELEMENTS  OF  ECONOMIC  THEORY 


From  the  economic  point  of  view,  a  fundamentally  desirable 
result  is  an  increasing  per  capita  production  of  consumption 
goods  for  the  world,  for  each  country,  and  usually  for  each 
business. 

Suggestive     ^-  Comparc  China  with  the  United  States,  with 
Questions.     ^  vicw  to  arriving  at  some  conclusion  as  to  the 
per  capita  production  of  utilities  in  the  two  countries.     A 
diagram  similar  to  the  following  may  be  used : 


CONDITIONS  AND 

FACTORS   AFFECTING 

PRODUCTION. 

UNITED  STATES. 

CHINA. 

RESULTS  UPON 
THE    UTILITIES 
PRODUCED  ARE 
IN    FAVOR    OF: 

Usages,  customs, 
and  laws  of  society, 
which    affect    pro- 
duction of  utility. 

.    : 

/ 

Physique,  intelli- 
gence, moral  stand- 
a,rds,  energy,  cour- 

, ^            ^.cMJ^y,.- 

t 

age,    skill,    etc.,    of 
man  as  a  producer. 

Variety  and  effi- 
ciency   of    various 
forms  of  capital. 

(^}-Ur, 

v.-i,;  •• 

Variety,   abun- 
dance,   and    distri- 
bution   of    natural 
resources. 

Fill  all  these  spaces  with  the  best  facts  you  can  choose,  and,  in 
the  last  column,  state  the  result  of  each  comparison  as  being,  in 
your  opinion,  favorable  to  China  or  to  the  United  States. 

When  the  diagram  is  as  complete  as  you  can  make  it,  study 
the  last  column,  and  try  to  come  to  a  conclusion  as  to  which 
country,  on  thf  whole,  can  produce  more  consumption  goods 
per  person. 


PRODUCTION  i.  223 

a.  Did  you  have  any  difficulty  in  filling  in  the  dia- 
gram?    Wliy? 

b.  Could  you  fill  it  out  better  after  you  had  studied 
the  facts  about  these  two  countries  for  a  longer 
time? 

c.  Do  some  of  your  results  in  the  last  column  seem 
favorable  to  one  country  and  some  to  the  other? 
Can  you  come  to  any  final  conclusion  as  to  the 
comparative  productivity  of  the  two  countries 
without  knowing  how  much  one  country  has 
the  advantage  of  the  other  in  the  various  par- 
ticulars? Why?  Would  it  take  hard  study 
to  answer  accurately  the  question  of  how  much 
advantage  either  possesses?  Is  it  worth  an  at- 
temi^t? 

2:  Try  to  make  a  similar  diagram,  (a)  to  compare  the  United 
States  of  to-day  with  tlie  American  colonies,  (0.  to  compare 
the  United  States  with  England,  (cX.witli  Germany,  {d)  with 
America  at  the  time  of  Columbus. 
^  3.  Give  illustrations  of  capital  in  the  form  of  tools  and 
machinery  which  have  been  thrown  aside  for  more  efficient 
capital. _.  ^.w.xiu.  ,  e^,^ 

I    4.  What  is  likely  to  be  the  fate  of  the  steam  locomotive? 
Why? 

5.  Give  some  illustration  of  a  business  that  has  failed 
because  its  competitors  used  better  tools  and  machinery. 

G.  Give  illustrations  of  businesses  which  have  failed  through 
the  fault  of  the  undertakers.'^  ^  -^  ^'  ^      ^'  ^-^;    ^  ^^' - -^  '***- 

7.  Xame  enterprises  that  have  been  given  up  because  the 
particular  natural  resource  needed  gave  out. 
r     8.  Xame  enterprises    which    have    been  started   when  a 
'  natural  resource  was  found  in  a  new  field.  /'   - 

9.  Give  illustrations  of  the  effects  of  inventions  upon  the 
production  of  several  articles.    ^ '/ •  f-^^'^^^,   ,y/v^r=^-^^v,,^?x:^r>- 

10.  Show  the  effect  of  some  of  the  discoveries  in  chemistry 

upon  production.  '  --  '-^'"^^JTT^^  ^_ .,  j 


224  ELEMENTS  OF  ECONOMIC  THEORY       ^  ^     Sf  U  dr 

11.  Give  similar  illustrations  for  physics,  geology,  biology,  ' 
t^L.£^  physiology,  meteorology. 

'^ '^ '  '12.  Suppose  two  machines,  one  very  simple  and  the  other 

complex  and  heavy,  produce  in  a  given  time  the  same  amount 
of  consumption  goods;  which,  other  things  being  equal,  is  the 
better  machine?     Why?     Give  examples  of  this. 

13.  Suppose  men  could  have  gotten  the  same  amount  of 
consumption  goods  with  one  hundi-edth  part  of  the  tools  and 
machinery   they   npw    use;   wpuld    they   have   had   all    this 
machinery?     AVhy?-'^'  '".:^£^ '  ^'"^"' '    '  " '' 
,14.  Is  an  abundance  of  capital  in  the  form  of  railroads, 
r'ylnanufactories,  machinery,  etc.,  a  sure  sign  that  the  people  are 
'    jhaving  their  wants  well  supplied?     Why? 
i^    15.  Give  illustrations  of  natural  resources  which  have  been 
"^^      'withdrawn  from  use. in  production  because  the  owner  was  not 
satisfied  with  the  return — his  share  in  distribution. 

16.  Give  similar  cases  for  capital. 

17.  Give  cases  of  men  who  have  been  inefficient  in  produc- 
tion because  of  failure  to  get  what  seemed  to  them  a  sufficient 
reward  for  their  efforts.  Why,  under  such  circumstances,  do 
they  not  give  up  trying  to  produce  at  all? 

j^  18.  Show  that  society  sometimes  withdraws  its  cooperation 
from  a  business  enterprise  because  it  does  not  get  a  sufficient 
share  of  the  product. 

.^JV  19.  Give  illustrations  which  are  as  nearly  opposite  those 
given  in  answers  15-18  as  possible. 

20.  What  do  you  think  of  the  business  ability  of  a  man 
who  keeps  a  pair  of  horses  thin  and  weak  from  lack  of  food, 
in  order  to  save  in  his  bill  for  feed?     Why? 

21.  What  do  you  think  of  a  society  that  treats  any  of  its 
human  producers  in  a  similar  way? 

22.  How  can  it  be  avoided?    Is  the  question  a  simple  one? 


> 


SHARING  THE  PRODUCT  225 


Chapter  III 

SHARING  THE   PRODUCT — DISTRIBUTION" 

Taxes,  Profits,  In  the  equation,  society  +  man  +  capital  -\- 
Rent.  Interest,  natural  resourccs  =  utility,  it  might  be  thought 
at  first  that  man  appears  but  once.  The  truth  is,  however,  aa 
we  have  just  seen,  that  he  is  concerned  with  every  factor  of 
each  member  of  the  equation.  It  is  man's  want  or  impulse 
to  act  which  sets  the  whole  process  of  production  in  motion. 
There  could  be  no  such  thing  as  a  utility,  a  want-satisfying 
quality,  without  some  one  to  feel  the  want.  Furthermore, 
man  is  the  only  actor  in  tlie  productive  process.  He  and  his 
fellows  make  up  society,  he  puts  forth  his  individual  energies, 
he  possesses  rights  of  property  over  natural  resources  and  cap- 
ital. Therefore,  the  problem  of  distribution  seeks  an  answer 
to  the  question :  How  is  it  determined  what  amount  of  all  that 
is  produced  shall  go/to  men  as  social  beings,  as  they  exercise  the 
functions  of  the  society  factor  in  production;  what  amount  to 
men  as  owners  of  the  natural  resources  used ;  what  amount  to 
men  as  owners  of  the  capital  required ;" and  what  amount  to  the 
men  actually  engaged  with  hand  and  brain  in  the  productive 
process?  The  common  names  of  these  respective  shares  are  aa 
follows:  society  receives  taxes;  owners  of  natural  resources, 
r^nt;  owners  of  capital,  interest;  man  as  the  independent 
manager  of  the  business,  profits;  and  man  as  a  subordinate 
worker,  wages. 

World  Income   "^^^  ^^^^^    amouut  of  goods  produccd  in  the 
and  Niitionai    worUl  duriiig  a  year  may  be  called  the  world's 

Iiic«)me  or  r>        j  j 

dividend.       income,  or  dividend,  for  the  year.     In  a  similar 
way,  there  is  a  national  dividend  for  each  nation  and  a  separate 


226       ELEMENTS  OF  ECONOMIC  THEORY 

dividend  for  each  business  enterprise,  whether  that  of  a  man 
working  alone,  or  that  of  a  corporation.  Taking  one  year 
with  another,  it  is  evident  that  private  persons,  corporations, 
nations,  and  the  world  must  be  restricted  in  the  satisfaction  of 
their  wants  by  the  amounts  of  goods  produced,  by  their  various 
annual  dividends. 

In  Part  I,  page  44,  this  dividend  or  income  of  the  world  was 
referred  to  as  a  stream  from  which  all  persons  take  for  their 
own  consumption,  and  to  which  they  return  the  goods  which 
they  themselves  produce.  It  is  from  this  stream  of  goods, 
then,  that  the  various  shares  in  distribution  may  be  thought 
of  as  being  taken. 

Taxes  seem  a  grievous  burden  to  most  people, 
but,  rightly  viewed,  justly  laid,  economically 
collected,  honestly  and  wisely  expended,  they  would  appear 
as  that  part  of  a  national,  state,  or  municipal  dividend 
which  satisfies  man's  want  better  when  socially  consumed 
than  when  individually  consumed.  In  the  United  States, 
the  national  dividend,  and  consequently  the  incomes  of  men, 
are  subject  to  the  levies  of  such  a  large  number  of  taxing 
bodies,  acting  so  little  in  harmony,  and  with  so  little  thor- 
ough knowledge  of  the  effect  of  their  actions  upon  the 
persons  taxed,  that  the  whole  system,  or  lack  of  it,  is  in  a 
chaotic  state. 

Suggestive     1.  Ask  vour  father,  or  some  owner  of  real  estate. 

Questions  and  /.  i   •  i  mi 

Exercises,     for  One  of  his  tax  bills. 

a.  How  many  kinds  of  taxes  are  mentioned  on  the 
bill?     What  are  they? 

b.  Ask  the  one  from  whom  you  get  the  bill 
whether  or  not  he  makes  any  other  compulsory 
payments  for  public  purposes.  If  so,  what  are 
they? 

c.  Compute  his  regular  yearly  compulsory  payments 
for  public  purposes,  and  divide  the  sum  by  the 
market  price  of  the  property  upon  which  the  pay- 


SHARING  THE  PRODUCT  227 

ments  are  levied.     What  is   the  result  for  each 
doUai'  of  such  property? 

d.  Divide  the  total  tax  for  each  purpose  by  the  total 
property  on  which  it  was  levied.  What  are  the 
results  for  each  dollar  of  such  property? 

e.  Ai'range  these  results  for  each  dollar  of  property 
(per  cents)  in  a  column,  from  greatest  to  lowest. 

/.  Do  you  know  who  determined  what  these  per  cents 
should  be,  how  the  joroperty  was  valued  or 
"assessed,"  who  collected  the  taxes,  what  was 
done  with  the  money,  how  accounts  for  it  are 
rendered,  etc.? 

g.  Are  these  things  worth  inquiring  about? 

2.  Select  one  or  more  of  the  different  kinds  of  tax  found 
as  above,  and  ask : 

a.  Who  ordered  this  particular  tax  collected? 

b.  Who  assessed  the  property  on  which  it  was  levied, 
and  by  whose  order? 

c.  Who  sets  a  legal  limit  to  the  per  cent  of  this  par- 
ticular tax  that  can  be  levied?  ' 

d.  Who  made  out  the  tax  bill? 

e.  Who  collected  the  tax? 

/.  Who  took  the  tax  for  safe  keeping? 
g.  Upon  whose  order  was  tlie  tax  expended? 
//.  Wlio  made  a  report  to  the  tax  payer  to  tell  him 
what  had  been  done  with  his  money? 

3.  The  following  exercise  Ms  also  suggested,  either  for  the 
chiss  or  for  one  or  tv.'o  sUuleiits  who  can  give  it  special  time. 


'A  modification  of  a  plan  in  iise  by  Professor  Frederick  R.  Clow,  of 
Oslikosli,  Wisconsin.  See  The  Study  of  Municipal  Finances— 
"Quarterly  Journal  of  Economics,"  vol.  X. 


228 


ELEMENTS  OF  ECONOMIC  THEORY 


Schedule  op  Ordinary  and  Extraordinary  Receipts  and 
Expenditures  of  Some  Political  Society — Village,  Town, 
City,  County,  or  State— for  One  Year. 


General 
Functions 

Functions  of  the  Political  Society 
in  More  Detail. 

Expenditures. 

Receipts. 

of  the 
Political 
Society 
Studied. 

Ordi- 
nary. 

Extra- 
ordi- 
nary. 

Ordi- 
nary. 

Extra- 
ordi- 
nary. 

Maintenance 

Legislative  Department 

(General  Executive  Department 

f jBgal  Dejiartment   . . . 

'■'V'^^ 

of  its  s„ 

Government, 

::f:::: 

Keeping 

Up  its 

Machinery. 

Elections ^j. .  .-f.^. .« . 

Other  Such  Purposes  .!vrfi<v%+M<.-- .. 
Totals '{ 

::!::: 

Poor     .               

Care  of 

Defective  

Dependents.: 

Totals    .... 

Qam^ijturpi.h.Mt.. 

Police 

........ 

Militia 

Public 

::::".:: 

Safety. 

( )tli('r  Protective  Fimctions 

Totals      

Streets    

Public 

•  •  0  — 

Totals          .  . 



Culture 

Museums    ....        

and 

Information 

Functions. 

Totals 

Water  Works 

• 

"  Quasi- 

Gas  and  PZlectric  Light 

Enterprlses. 

Totals  

Other 

Functions. 

Totals 

Totals. 

Balances. 

SHARING  THE  PRODUCT  229 

4.  Try  to  imagine  the  condition  of  the  people  in  the  polit- 
ical society  studied  if  all  the  functions  as  above  mentioned 
should  be  suddenly  stopped. 

5.  Are  taxes  an  unmixed  evil?     Why? 

6.  Why  do  people  so  often  think  taxation  a  sort  of  legal 
robbery? 

Man,  in  his  role  of  manager,  is,  in  one  sense, 

Profits.  ,  .  ,      ,  .  .  . 

the  most  important  person  m  a  given  case  of 

production.  "While  society  can  not  be  avoided,  and  man  as 
owner  of  natural  resources,  of  capital,  and  of  productive 
energy  is  necessary  to  the  success  of  any  business,  still,  man  as 
manager,  director,  or  undertaker,  interprets  his  own  wants, 
and  sets  about  satisfying  them  in  a  certain  order,  if  he  is  a 
self-sufficing  producer ;  and,  if  he  is  not  a  self-sufficing  pro- 
ducer, he  interprets  the  wants  of  other  men,  and  sets  in 
motion  various  productive  processes,  in  order  that  he  may 
have  in  his  possession  goods  that  his  fellows  value  highly 
enough  to  be  willing  to  give  him  satisfactory  amounts  of 
other  goods  in  exchange  for  them.  If  he  misjudges  the 
valuations  of  society,  and  produces  something  which  can 
not  be  disposed  of  for  money  to  pay  the  various  expenses 
he  has  incurred  and  leave  something  besides,  the  under- 
taker suffers.  If,  on  the  other  hand,  he  has  a  product 
which  consumers  value  so  highly  that  they  will  pay  him 
more  than  enough  to  cover  all  the  expenses  he  has  incurred 
in  its  production,  the  surplus  legally  belongs,  in  accordance  j 
with  existing  laws,  to  the  undertaker.  This  surplus  is  his 
prdit,  his  reward  for  the  risk,  responsibility,  and  effort 
in  undertaking  and  carrying  through  the  productive  proc- 
ess. The  undertaker  is  a  special  kind  of  workman,  and 
profit  is  a  special  form  of  wages  paid  to  him  by  the  consumers 
of  his  product. 

1.  In  what  ways  is  the  word  "profits"  used  in 

o.iestioiis.    common  business  speech? 

2.  Why  is  it  well  to  pick  out  one   moaning  of  the  word 
which  we  will  all  accept? 


230       ELEMENTS  OF  ECONOMIC  THEORY 

3.  Give,  in  yonr  own  words,  a  true  illustration  of  profits  in 
actual  business.  '-  (■  f**''  "^"*'""'^'  ^...^.^-.-b.^—- ^  , 

4.  Give  examples  of  cases  where  profits  have  been  enormous. 

5.  Show  that  a  man  who  receives  immense  profits  may  not 
necessarily  make  the  general  public  poorer  than  it  was  before. 
Explain. 

6.  Show  that  in  such  a  case  the  public  may  be  even  better 
off  after  having  paid  the  man  his  profits,  than  not  to  have  paid 
him  anything  and  at  the  same  time  failed  of  enjoying  the 
results  of  his  efforts.  Might  society  be  still  better  off  if  he 
performed  the  same  services  for  less  pay? 

7.  What  difference  is  there  between  a  man  who  sees  valu- 
able goods  in  existence,  and  sets  to  work  to  get  the  ownership 
of  those  goods  away  from  others  and  into  his  own  hands,  and 
the  man  who  sets  productive  processes  in  motion,  and  thereby 
causes  the  production  of  a  great  new  stream  of  goods  from 
which  he  takes  many  for  himself?  Explain  and  illustrate  by 
actual  examples. 

8.  Which  man  is  the  nearer  right?     Why? 

f  In  general,  the  worker  for  wages  does  not  share 

in  the  risk  of  an  enterprise.  He  makes  a  con- 
tract with  an  employer  to  spend  a  certain  amount  of  time  in 
adding  utility  to  materials  owned  by  the  employer,  for  which 
effort  he  is  to  receive  a  certain  payment  in  money  or  goods. 
This  payment  is  often  made  to  him  before  the  employer  has 
disposed  of  the  utility  produced  to  traders  or  to  consumers ; 
commonly,  also,  before  the  material,  as  a  whole,  has  been  put 
in  the  form  of  a  completed  consumption  commodity.  Whether 
the  commodity,  when  completed,  proves  valuable  to  society  or 
not,  the  wage-worker  usually  has  his  wages.  But  wages  are 
not,  as  a  rule,  paid  before  the  receiver  of  them  has  created 
utility  for  the  employer.  Hence  the  employer,  in  paying 
wages,  does  not,  as  a  rule,  do  more  than  give  his  workers 
consumption  goods,  less  in  value  than  the  utilities  pre- 
viously created  for  him  by  them.  If  employer  and  em- 
ployed are  regarded  as  cooperators  in  a  productive  enterprise, 


SHARING  THE  PRODUCT  231 


[ -^u^e^M/^  '^^'■■^^^'■■^^^^  J  usDd  more /f-OT:j^iiHiu;T   .-^ 


/V~!V-<_1^  (_  -U 


\ 


230 


,i*- 


^ 


ELEMENTS  OF  ECONOMIC  THEORY 


1  ^«:u>-« 


JJkis 


'^sb^^3i;;^i^  ■'    ;i^»^)^ 


P   ^^>\r\  ./^r^s3   — 


■?^v  .1 


^'- '^-'^^i-l'A . 


SHARING  THE  PRODUCT  231 

both  of  whom  expect  to   be  rewarded  for   their  efforts  out 

of  the  final  vahie  of   the  completed  product,  the  employer;    . 

in  fact  buys  out  the  gi-adually  accumulating  shares  of  thel^-^-  ^ 

employed  in  the  final  product  for  successive  cash  payments — \l^^n>-<d^ 

wages. 

Of  course,  what  has  just  been  said  applies  especially  to 
directed  workers  in  the  production  of  wealth, — potential 
utilities, — rather  than  in  the  production  of  services, — actual 
utilities.  By  the  necessity  of  their  nature,  services  must  be 
consumed  as  soon  as  produced.  Therefore,  the  goods  which 
service  producers  get  in  return  for  their  own  products  are 
clearly  payments  for  completed  consumption  commodities. 
As  a  rule,  the  terms,  salary  and  fee,  are  used  more  commonly  ^ 

than  wages  to  describe  the  rewards  received  by  producers  of  ^^^^^^ 

services.  ^hn      '  ^\ 

""^su    estive     1-   Compare  persons  who  receive  a  salary  with    ^'"'f^-/'^ 

Questions,     those  whosc  pay  is  commonly  called  wages,  in^^^^^^^^ 
respect  to  losses  suffered  in  pay  when  occasionally  absent  from 

work.  C/t'-*-^  .^^r-^^^-'^     A-^^f/*-^   -^^^^-.t^ 

2.  Compare,  in  length  and  definiteness,  the  contract  for  i]ajJUU^^_ 
employment  made  by  a  salaried  p^son  witl^JhaU)f  a  wage-    ^.  y-// 
worker.  ^'*^  x.-*--'*.^-*^'^        .-^^..^ 

3.  In  which  case  is  the  personal  relationship  between 
employer  and  employed  the  closer?     Give  examples. ^7Xg.4u-_ 

4.  In  respect  to  the  upper  and  lower  limits  of  wages : 

a.  Can  wage-earners,  as  a  class,  continually  receive 
less  wages  than  will  keep  them  and  their  families 
alive?     Why?    ''TU-;' 

h.  As   business   is  now  organized,    can   they   habit-    o 

ually   take  for   their  own   use  the  whole  stream  <^.  ^/^ 
of  consumption   goods    produced    by   their    aid? 

Why?  7;^ 

c.  What  other    a'2^}^^.^^gf;r^rson8have  d^h^ 
this    product?^w{tywiir 'no1;''''som^  group   sur- 
render   habitually    its   claim   to   a  share    in   the 
product? 


t 


232      ELEMENTS  OF  ECONOMIC  THEORY 

_    cl  Did  yon  ever  hear  of  a  strike  where  the  strikers 
f         did  not  seem  to  realize  that  there  was  any  limit  to 

the  wages  that  could  be  paid  them?    Give  some 

account  of  it. 

5.  Within  the  maximum  and  minimum  limits  of  wages  sug- 
gested above,  what  does  the  social  or  market  value  of  differ- 
ent grades  of  labor  have  to  do  with  the  amount  of  wage  given 
to  a  single  person?     Explain. 

6.  How  are  the  individual  valuations  of  a  certain  kind  of 
labor,  out  of  which  the  market  valuation  is  made  up,  affected 
by  the  absolute^tnity  and  quantity 'of  labor?    Explain. 

We  have  seen    that   natural    resources  ai'e    a 

Kent.  .  ...  ,         .  TTT     1  1 

primary  requisite  m  production.  We  have  also 
seen  that  civilized  societies  protect  men  in  the  exclusive 
possession— full  ownership — of  tillage  lands,  forests,  mines, 
building  sites,  water  power,  etc.  For  purposes  of  turning 
machinery,  one  waterfall  is  better  than  another ;  for  mining 
purposes,  one  mine  surpasses  another;  for  raising  wheat,  two 
tracts  of  land  differ;  for  residence  purposes,  and  for  town 
sites,  men  prefer  one  tract  of  land  to  another.  By  virtue, 
therefore,  of  the  superiority  of  the  natural  resources  owned  by 
some  persons  over  natural  resources  of  similar  kinds  owned  by 
others,  those  who  own  the  best  natural  resources  for  the  pro- 
duction of  goods,  grain,  timber,  ores,  coal,  factories,  homes, 
etc.,  have  an  advantage  over  other  persons  in  the  production 
of  these  goods.  The  advantage  which  comes  to  a  man  by 
Mrtue  of  his  ownership  of  a  superior  natural  resource, 
whether  he  gets  this  advantage  by  utilizing  it  himself  or  I 
by  selling  its  use  to  some  one  else,  is  rent.  In  cases  where 
there  is  public  ownership  of  relatively  good  natural  re- 
sources, rent  may  be  collected  by  the  public.  The  fact 
that  one  piece  of  land  is  superior  to  another  for  a  certain 
purpose,  makes  men  who  deshe  land  for  that  purpose  will- 
ing to  pay  sometliing  for  the  use  of  the  better  piece.  The 
fact  that  land  is  variously  owned  determines  to  whom  this 
payment  goes. 


SHARING  THE  PRODUCT  233 

The  "Unearned -^^^^y  P^^^*^^^'  ^Specially  socialists  and  the  fol- 
increment."  lowGi's  of  Heni'y  Geoi'ge,  point  ont  that  a  natural 
resource  often  becomes  more  valuable  for  residence  and  pro- 
ductive purposes,  not  from  any  improvements  which  the 
owners  themselves  put  upon  their  property,  but  because  of  the 
mere  increase  in  numbers  of  the  people,  with  all  their  needs 
and  productive  enterprises,  near  this  particular  natural 
resource.  Owing  to  its  scarcity  for  particular  purposes,  it 
increases  in  value,  and  this  increase  in  value  (increment)  is 
"uneai'ned"  by  the  owner.  It  was  really  caused  by  the 
society  which  has  grown  larger  and  more  complex  near  it. 
Their  conclusion  is  that  the  increase  in  value,  the  "unearned 
increment,"  belongs  not  to  the  individual  owner,  but  to 
society. 

From  this  point  of  view,  then,  there  is  one  direct  line  of 
study  and  thinking  which  will  lead  toward  a  knowledge  of 

what  single-taxers  and  socialists  think  ought  to  be  done. . 

The  following  extended  extract  from  the  Report  of  the 
Bureau  of  Labor  Statistics,  Illinois,  for  1894,  explains  itself  in 
this  connection: 

ECOXOXIC   HISTORY   OF   A   QUARTER   ACRE   liT   CHICAGO 

"Probably  the  most  striking  illustration  ever  made  of  the 
pecuniary  advantages  of  social  growth  which  attach  to  land 
well  situated  to  command  public  benefits,  was  presented  at  a 
dinner  of  the  Chicago  Real  Estate  Board,  in  November,  1893, 
by  F.  R.  Chandler,  a  real  estate  expert  of  long  experience, 
whose  integrity  and  conservative  judgment  give  to  his  state- 
ments exceptional  importance.  It  consisted  of  a  table  show- 
ing the  economic  history,  year  by  year,  from  1830  to  1894,  of 
the  most  valuable  quarter  acre  of  land  in  the  city  of  Chicago. 
This  table  is  a  genuine  contribution  to  economic  data. 

"Mr.  Chandler's  preparatory  labors  were  arduous  and  con- 
scientious. He  first  searched  for  the  prices  at  which  numer- 
ous valuable  sites  in  the  business  center  of  the  city  had  been 
sold  since  1830;  and  though  no  single  site  had  been 
transferred  often  enougli  to  indicate  its  annual  changes  of 
value,  the  great  mass  of  statistics  which  JMr.  Chandler  col- 
lected as  to  prices  in  the  neighborhood  of  every  lot  that  came 


234  ELEMENTS  OF  ECONOMIC  THEORY 

within  the  range  of  his  examination,  together  with  the  prices 
of  each  such  lot  itself,  enabled  him  to  fairly  estimate  the  land 
Yalue  of  that  neighborhood.  By  applying  this  method  to 
several  of  the  more  valuable  neighborhoods  of  the  business 
section,  and  confirming  his  estimates  by  reference  to  public 
records,  private  archives,  and  market  reports,  he  ascertained 
the  different  values  at  different  times.  Mr.  Chandler  then 
obtained  the  opinions  of  one  hundred  of  the  best  posted  real 
estate  men  in  Chicago  as  to  the  most  valuable  quarter  acre  in 
the  city.  Preponderance  of  opinion  settled  upon  the  southwest 
corner  of  State  and  Madison  streets,  part  of  the  school  fund 
property  controlled  by  the  Board  of  Education.  This  had 
never  been  sold,  but  with  the  information  he  had  already 
collected  regarding  the  prices  of  neighboring  property,  Mr. 
Chandler  was  able  to  determine  the  value  of  the  quarter  acre 
in  question  for  each  year  from  1830  to  1894.  This  is  the 
property  to  which  the  table  relates. 

"But  for  the  figures  showing  the  number  of  improved 
average  Illinois  farms,^  and  the  number  of  days'  or  years' 
work  at  unskilled  labor"  that  would  have  been  necessary  each 
year  to  buy  this  quarter  acre,  the  table  on  the  opposite  page  is 
as  Mr.  Chandler  constructed  it,  the  barometrical  changes 
referring  of  course  to  business  conditions. 

"Here  we  find  this  quarter  acre  of  raw  prairie  land  near  the 
mouth  of  the  Chicago  Eiver,  worth,  in  1830,  when  the  popu- 
lation of  Chicago  numbered  fifty  people,  but  620  in  money,  or 
13i  days'  unskilled  labor.  It  would  not  then  have  exchanged 
for  one  one-hundredth  part  of  an  average  Illinois  farm  of  the 
present  time.  With  population  increasing  and  business  prom- 
ising, this  quarter  acre  rose  in  value  year  by  year  until,  in  the 
boom  of  1836,  it  was  worth  $25,000.  At  that  time,  it  would 
have  taken  fifty-five  years'  unskilled  labor  to  buy  it,  and  it 
would  have  exchanged  for  twelve  average  Illinois  farms  of  the 
present  time.  But  the  panic  came  in  1837,  and  this  quarter 
acre  fell  to  almost  one-tenth  of  its  boom  value.     Through- 

^The  average  size  of  farms,  62.38  acres,  and  the  average  value, 
832.87  per  acre,  are  taken  from  the  report  of  this  Bureau  [Labor 
Statistics,  Illinois],  for  1890,  p.  257. 

"Unskilled  labor  is  estimated  at  $1.50  a  day  for  each  year  of  the 
period.  Part  of  the  time  it  was  less,  and  part  of  the  time  more ; 
but  this  sum  will  be  recognized  as  fair  for  the  purposes  of  the 
comparison. 


SHARING,  THE  PRODUCT 


235 


1830 
l-s:U 

1833 
1834 
1S3.5 
1836 


[JtvUJE 


Changes  of  .Barometer. 


Clearing 

Fair 

War  storm. 


■  Rising 


\  Depression . 


■Rising 


Booming 

Panic 

Showers  of  gold.. . 
Mirage  of  wild  cat . 


) 
^Rising. 


Booming 

Panic 

1838 

1839 

1840 

1S41 

184: 

1843 

1844 

1845 

1846 

1847 

1 848 

1849 

18.50 

1851 

18.52 

1853 

1854 

1855 

18ol- 

185 

1858 

1859 

1860 

1861 ! 1 

I^Jj.'^l  )■  Great  war  cloud 

lHri4i  j 

1865  Calm 

1866  -) 

1867  I  . 

18681  ;^  Rising 

1869!  I 
1870  J 


Drought. 
Buoyant. 
Booming 
Panic 


Popula- 
tion of 
Chicago, 


■  Depression . 


1871 

■872 

1873 

1874  1 

1875 

1876 

1877 

1878 

1879 

1880 

1881 

1882 

1883 

1884 

1885 

1886 

1887 

1888 

1889 

1890 

1891 

1892 

1893 

1894 


Very  hot. 
Booming  . 
Panic  — 


'^Depression. 


Gold  rays. 


Bising. 


Stormy. 


Rising  higher. 


Booming 

)  Columbian  sunshine 
(     overcomes  panic. . 


Value  of 

quarter 

acre. 


50 

100 

200 

350 

2,000 

3.265 

3,820 

4,179 

4,000 

4.200 

4,470 

5,000 

6,000 

7.589 

8,000 

12.088 

14.169 

16.8-59 

20,023 

23.047 

28.269 

34,000 

38,754 

60,662 

65,872 

80.023 

84.113 

93,000 

91.000 

95.000 

109,000 

120,000 

138,000 

160,000 

169.353 

178.900 

200,418 

220,000 

252.054 

272.043 

298,977 

325,000 

367,396 

380,000 

395.408 

400,000 

407.661 

420,000 

436,731 

465.000 

503,298 

530.000 

560,693 

590.000 

629.985 

700,000 

825.880 

8.50.000 

875.500 

900.000 

1,098.570 

1,200.000 

1,. ■$00,000 

1,400,000 

1,.5I)0,(V)0 


§20 
22 
30 
50 

200- 
5,000 

3;8oo 

2,500 

2,000 

1,500 

1,250 

1,000- 

1,100 

1,200 

5,000 

15.0D0- 

12.000 

13.000 

15.000 

17,500 

20,000 

2.5,000 

30,000 

35,000 

40,000 

45  Yl"" 

35,000 

30,000 

29.000 

28.000 

28,000 

32,000 

33,000 

36,000 

45.000 

57.600 

65,000 

80,000 

90,000 

120,000 

100,000 

125,000 

100,000 

95,000 

92.500 

90,000 

90,000 

95,000 

119.000 

130,000 

145,000 

175, OlW 

2*8.000 

250,000 

275,000 

325.000 

*435,000 

600.000 

750.000 

900,000 

1.000,000 

1 ,000  (JOO 

1.000,000 

1,2.">0.000 


10 
40 
67 
-300 
2400 
400 


Number 
of  average 
Illinois 
farms  at 
§2,050.  nec- 
essary to 
buy  the 
quarter  acre. 


Number  of 
years'  work 

at  $1.50  a 
day  and  300 
daj  s  to  the 
year,  nec- 
essary to 
buy  the 
quarter  acre. 


0.009 
O.OII 
0.015 
0.024 
0.098 
2.44 
12.2 
1.47 
1.22 
0.97 
0.73 
0.61 
0.49 
0.54 
0.59 
2.44 
7.32 
5.85 
6.34 
7.32 
8.54 
9,76 
12.2 
14.63 
17.07 
19.51 
21.95 
17.07 
14.63 
14.15 
13.68 
13.66 
15.61 
16.1 
17.56 
21.95 
28.1 
31.71 
39.03 
43.9 
58.54 
48.7« 
60.73 
48.78 
46.39 
45.12 
43,9 
43,9 
46,39 
58.05 
63.41 
70.73 
85.37 
116.1 
121 .95 
i;{4.15 
158.54 
212.2 
292.2 
365.85 
439,02 
487.8 
487,8 
487.8 
009.70 


tl3.33 

tl4.67 

+20 

t33.33 

tl33.33 

11.11 

55.56 

6.67 

5.58 

4.44 

3.33 

2.78 

2.22 

2.44 

2.67 

11.11 

33.33 

26.67 

28.89 

83.33 

38.89 

44.44 

5S.50 

66.67 

77.78 

88.89 

100 

77.78 

66.67 

64.44 

62.23 

62.22 

71.11 

73.3a 

80 

100 

128 

144.44 

177.78 

200 

266.67 

222.22 

277.78 

222  22 

211.11 

205.56 

2110 

200 

211.14 

264  49 

288.81 

322,22 

388.89 

628.89 

556.56 

611.11 

722.22 

744,44 

1,. 333.33 

1,660.67 

2,000 

2.222.22 

2,222.22 

2,222  22 

2.777  78 


*  .Vuthority  of  Real  Estate  Board  Vahiation  Committee. 

t  This  represents  the  number  of  days  at  §1.50  a  d.^y  necessary  to  buy  the  quarter  acre 


236       ELEMENTS  OF  ECONOMIC  THEORY 

out  the  succeeding  business  depression,  it  continued  to  fall, 
until  1842,  when  it  reached  bottom  at  a  value  of  $1,000, 
which  was  five  times  as  much,  however,  as  its  value  just 
before  the  boom  began. 

"With  the  return  of  better  times  in  1843,  and  an  increase  of 
population,  the  quarter  acre  began  again,  though  timidly,  to 
rise  in  value;  but  in  1845,  with  a  largely  increased  popula- 
tion, it  had  risen  to  $5,000,  and  in  1846,  in  the  second  boom, 
to  $15,000,  The  boom  was  followed  as  usual  by  a  panic,  and, 
notwithstanding  an  increase  in  population  of  eighteen  per 
cent,  the  value  of  the  quarter  acre  dropped  to  $12,000.  The 
collapse  of  this  boom,  it  will  be  observed,  left  the  property  at 
a  value  twelve  times  higher  than  tlie  point  to  which  it  had 
dropped  upon  collapse  of  the  previous  boom. 

"The  gold  discoveries  and  a  continual  growth  in  population 

revived  the  value  slightly  in  1848.     From  that  time  on,  it  rose 

rapidly  to  a   culmination  of  $45,000 — equal  to  twenty-one 

average  Illinois  farms  of  the  present  time,  and  one  hundred 

years  of  one  man's  labor — in  the  boom  year  of  1856.     The 

panic  of  1857  at  once  brought  it  down  to  $35,000,  and  the 

succeeding  period  of  hard  times  continued  to  reduce  it  until, 

in  1861,  it  was  as  low  as  $28,000.     But,  from  this  point,  it 

steadily  rose  through  the  war  and  the  brisk  times  that  fol- 

4  lowed,  and  even  through  the  period  of  the  great  fire,  until 

I  1872,  when  it  was  worth  $125,000.     Once  more  there  came  a 

l|  panic  and  a  depression,  out  of  which  this  quarter  acre  emerged 

I* in  1878  with  a  value  of  $95,000 — nearly  four  times  its  value 

I  -on  the  crest  of  the  first  boom,  six  times  its  value  on  the  crest 

\  of  the  second,  and  twice  its  value  on  the  crest  of  the  third. 

"With  the  return  of  better  times,  in  1879,  the  value  of  the 

quarter   acre   sprang   forward    once    more,    and   since   that, 

through  good  times  and  bad,  it  has  gone  steadily  on.     In  the 

boom  year  of  1890,  it  was  worth  $900,000.     The  next  year  it 

went  up  to  $1,000,000,  where  it  remained  until  1894,  when 

its  value  was  estimated  at  $1,250,000. 

'  'Six  hundred  average  Illinois  farms  would  not  now  exchange 
for  that  quarter  acre  of  raw  prairie  land,  and  nearly  3,000 
years  of  tbe  labor  of  one  man  would  be  required  to  buy  it. 
If,  500  years  before  the  Christian  era,  some  man  had  obtained 
employment  at  the  equivalent  of  $1.50  a  day,  had,  like  some 
Wandering  Jew,  been  preserved  through  all  the  vicissitudes 
of  the  centuries,  had  been  miraculously  sustained  without 
expense  for  any  of  the   necessaries  or  luxuries   of  life,  had 


-..-i^^-Vr 


SHARING  THE  PRODUCT  237 

done  his  work  regularly  from  that  day  to  this,  300  days  in 
the  year  -without  losing  a  day,  and  had  hoarded  all  his  wages, 
his  savings  would  not  yet  be  enough  to  buy  this  quarter  acre 
of  prau-ie  land  at  the  mouth  of  the  Chicago  Eiver."  / 

In  studying  this   problem   of   the  "unearned   increment"  |^^  (7^ ' 
further,    at  least  these  questions    should  be   continually   in         '  ;' 
mind:  ^. 

1.  May  a  system  of  land  owning,  which  might  have  worked     ■ 

well  if  established  in   a   country  from  the  beginning,  work  ^'^'"'^ 

great  injustice  if  quickly  put  in  place  of  another  centuries 

old? 

2.  Can  this  injustice  be  avoided  by  a  slow  process  of  substi- 
tution? 

3.  May  the  expected  advantages  to  be  secured  be  offset  by 
disadvantages  some  of  which  are  not  yet  apparent? 

4.  On  the  whole,  are  you  sure  the  change  should  he  made? 

5.  If  so,  are  you  sure  how  it  should  be  made?     How? 

All  sorts  of  persons,  from  the  boys  and  girls  who 
put  some  of  their  few  pennies  into  their  "own 
bank,"  or  a  "real  savings  bank,"  instead  of  spending  all  for 
candy,  marines,  or  tops,  up  to  the  millionaire  who  buys  shares 
in  railroads,  mining  companies,  wheat  farms,  canals,  and 
factories,  instead  of  spending  all  his  income  in  fancy  dress 
balls,  entertainments,  art  works,  travel,  and  retinues  of  serv- 
ants, have  the  choice  between  immediate  consumption  of  all 
the  goods  that  come  to  them  and  postponement  of  consumj)- 
tion  of  a  part  or  the  whole  of  their  income.  From  these 
unconsumed  portions  of  thousands  of  incomes, — savings,  they 
are  often  called, — come  the  funds  which  are  loaned  to  others, 
and  the  great  varieties  of  tools,  machinery,  buildings,  and 
improvements  of  all  sorts,  which  are  called  respectively  money 
capital  and  vested  capital. 

.  Capital  is  borrowed  from  the  owners  for  two  purposes: 
first,  tliat  the  one  who  borrows  may,  by  its  use,  make  his 
business  more  productive  of  utility ;  second,  that  the  borrower 


238       ELEMENTS  OF  ECONOMIC  THEORY 

may  have  consumption  goods  now  that  he  must  otherwise  wait 
for.  In  either  case,  the  lender  acts  upon  the  advice  that  "a 
bird  in  the  hand  is  worth  two  in  the  bush,"  and  demands  not 
only  that  goods  equal  in  amount  to  those  he  lends  shall  be 
returned  to  him  at  some  future  time,  but  more  goods.  This; 
excess  in  goods,  which,  in  the  opinion  of  lenders,  makes) 
future  possession  of  a  larger  quantity  equal  to  the  present '^ 
possession  of  a  smaller  quantity  of  goods,  is  interest. 

But  a  great  deal  of  capital  is  not  thus  loaned  to  others. 
Much  is  used  by  its  owners  in  their  own  productive  enter- 
prises. Here  again,  the  capitalist  expects  to  get  an  excess  of 
goods  in  the  future  over  those  he  refrains  from  consuming 
now.  In  these  cases,  just  as  truly  as  in  the  cases  where  cap- 
ital is  loaned,  the  excess  of  future  over  present  goods  is 
interest. 

The  rate  of  interest  on  loans,  Avhich  is  the  kind  we  hear 
most  about,  is  subject  to  all  those  individual  and  social  forces 
which  we  saw,  on  page  211,  to  be  affecting  the  individual,  and 
consequently  the  market  price,  of  any  commodity  that  is 
freely  bought  and  sold.  On  the  one  hand,  the  rate  cannot  go 
permanently  higher  than  borrowers  for  productive  purposes 
(as  this  is  the  most  important  cause  of  borrowing)  can  get 
from  their  productive  enterprises  by  the  aid  of  the  capital  bor- 
rowed. On  the  other  hand,  the  rate  cannot  go  lower  than  the 
amount  which  will  induce  owners  to  postpone  the  control  of 
their  own  goods  from  the  present  to  some  future  time. 

In  ordinary  loans,  there  is  some  possibility  that  the  lender 
will  lose  his  principal,  and  the  rate  is  higher  on  this  account. 
In  what  has  been  said,  this  possibility  has  not  been  considered, 
and  the  interest  above  defined  would  be  pure  interest. 

Suggestive     ^-  Compare   the  rate  of   interest  paid   by   the 

Questions.  United  States  on  bonds  with  that  paid  by  a 
company  formed  to  mine  gold  in  the  Klondike.  Which  is 
nearer  joure  interest?     Why? 

2.  Give  an  illustration  of  a  case  where  a  farmer  can 
"afford"  to  borrow  capital. 


^-A- 


^  ^  ^/.^  ^w.-s>  c^^ .^A^^  ^/j— M--^^-^.   . 

3.  Do  the  same  for  a  physician,  grocer,  teamster,  corpora- 
tion. 

4.  Would  men  ever  postpone  consumption  of  some  of  their 
income  if  there  were  no  possibility  of  getting  interest  on  it? 
Explain. 

5.  How  would  the  amount  saved  in  the  country,  as  a  whole, 
under  such  circumstances,  compare  with  the  amount  saved 
now?     How  do  you  know?     Are  you  sure  you  are  right? 

6.  Did  you  ever  hear  of  a  case  where  owners  of  capital  have 
paid  something  for  having  it  taken  care  of?     Explain. 

7.  If  this  was  a  case  of  less  future  goods  preferred  to  more 
present  goods,  was  the  deficiency  negative  interest?     Explain. 

p8.  Is  the  loan  rate  of  interest  different  in  different  countries 
at  the  same  time?     Why? 

■    9,  Is  it  different  in  different  parts  of  the  same  country  at 
the  same  time?     Why? 

// 10.  Do  you  know  all  about  the  causes  which  affect  rates  of 
interest? 

"varieties  of  '^'^^  diagram  on  the  next  page  suggests  the  great 
thr"Fac*tiJI-ifof '^'"'^®*'y  °^  ownership  of  the  "factors  of  produc- 
prodaction."  tiou"  now  existing.  It  will  also  help  us  to 
understand  how  the  products  of  various  enterprises  are  shared. 
In  the  first  case,  line  No.  1,  which  may  be  illustrated  by  a 
farmer  who  owns  his  own  farm,  stock,  buildings,  tools,  and 
machinery,  plans  his  own  work  and  carries  it  on  with  his  own 
hands,  the  problem  of  sharing  the  product  of  the  business  is 
just  that  of  determining  how  much  society  will  take  in  the 
form  of  taxes.  All  the  rest  belongs  to  him,  and,  although 
usually  not  so  divided  and  named  by  him,  is  really  composed 
of  profits,  rent,  interest,  ami  wngftR, 

In  the  second  case,  the  farmer  has  hired  workmen.  Taxes 
are  determined  as  in  the  first  case.  IIow  much  of  the  value 
of  the  rest  of  the  product  goes  to  the  hired  workmen  and  how 
much  to  the  farmer  himself,  is  determined  by  bargain,  a  wage 
contract,  between  the  two  parties.  If  each  party  is  primarily 
seeking  his  own  advantage,  the  contract  is  determined  by  con- 


2-iO 


ELEMENTS  OF  ECONOMIC  THEORY 


'■'I 

Social 
Control. 
(Legal.) 

Managers. 

Workmen. 

Owners 

OF 

Capital. 

Owners  of 

Natural 

Resources. 

1. 

Various 

political 

units. 

One  man. 

The  same 
man. 

The  same 
man. 

The  same 
man. 

2. 

t( 

One  man. 

Another 
man  or 

Same  as 
manager. 

Same  as 
manager. 

3. 

(< 

One  njan.-i. 

Another   ^ 
-^oUian  or 
men.   /.^^ 

Another 
man. 

The  same 
man. 

4. 

" 

One  man. 

Another 

man  or 

men. 

Another 
man. 

Another 
man. 

5. 

" 

Directors 
of  a  cor- 
poration. 

Directors 
and  stock- 
holders. 

The  same. 

The  same. 

6. 

<< 

Directors 
of  a  cor- 
poration. 

Other  men. 

Directors 
and  stock- 
holders. 

The  same. 

7. 

(1 

Directors 
of  a  cor- 
poration. 

Other  men. 

Stockhold- 
ers of 
another  cor- 
poration. 

The  same. 

8. 

" 

Directors 
of  a  cor- 
poration. 

Other  men. 

Stockhold- 
ers of 
another  cor- 
poration. 

Stockhold- 
ers of 
another  cor- 
poration. 

siderations  similar  to  those  mentioned  in  Chapter  I,  Part  III. 
Taking  one  year  with  another,  it  is  evident  that  the  fai'mer 
woald  not  continue  indefinitely  to  pay  in  wages  more  than  the 
increase  in  the  value  of  his  product  (either  to  use  at  home  or 
to  sell)  resulting  from  the  labor  of  those  he  hired.  Whether 
he  would  be  compelled  to  pay  well  up  toward  this  increase  in 
the  value  of  his  product  due  to  hired  labor,  would^epfinxLupoji 
the  eagerness  of  men  to  sell  their  services  to  him.     And  this 


SHARING  THE  PRODUCT  241 

eagerness  of  men  to  sell  their  services  would  depend  largely 
upon  their  opportunities  to  produce  independently,  or  sell 
their  services  to  others. 

In  the  third  case,  one  man  might  own  a  farm  and  the  stock 
and  tools,  a  second  man  cai'ry  on  the  farm  as  manager,  and  a 
third  man,  or  men,  work  for  this  manager  as  wage- workers. 
Here,  as  in  the  first  two  cases,  the  total  value  of  the  product 
places  a  limit  to  the  rewards  of  all  concerned.  Taxes  are 
theoretically  determined  by  the  voters.  The  manager  must 
make  two  bargains  insteacl  of  one,  to  determine  how  the  value 
of  the  rest  of  the  product  shall  be  divided.  He  must  make  v.' 
)ne  bargain  with  the  owner  of  the  land  and  capital,  and  2L/\<\^^jai^ 
jecond  bargain  with  his  hired  men.  The  bargain  with  the  ,/,,;^^<ri^ 
tiired  men  would  evidently  be  determined  by  the  same  con-  Ay<^J'->^^ 
jiderations  as  in  the  second  case.  Tbp  am  mints  f.hp.  mnnfigm- 
could  continue  to  pay_for  the  use  of  the  natural  resources  and 
^rhft  capital  would  be  limitftfl  by  tho  inp.rftn.qft^ill^ the  value  of 
iheprodiict  at  his  disposal  due  to  their  help.  More  than  this 
he  could  not  regularly  pay  because,  to  work  without  capital 
and  land  under  his  own  control,  simply  as  a  hired  worker  him- 
self, would  pay  him  better.  Whether  he  would  be  forced  to 
pay  well  up  to  this  limit  would  depend  upon  the  probable  suc- 
cess of  the  owners  in  getting  more  value  out  of  their  property 
by  using  it  themselves,  or  selling  its  use  to  some  one  other  than 
this  particular  farmer. 

The  fourth  case  differs  from  the  third,  in  the  fact  that  there 
is  a  fourth  separate  party  to  be  considered.  If  one  man 
owned  a  farm  and  another  stock  and  tools,  which  farm  and 
equipment  a  third  man  used  with  the  aid  of  hired  men,  this 
case  would  find  an  illustration.  The  case  does  not  differ  from  f 
the  third  except  in  the  fact  that  the  manager  would  need  to 
make  one  bargain  with  the  owner  of  land  and  another  with  the 
owner  of  capital.  The  amounts  that  all  taken  together  could 
.receive  would  depend  upon  the  productivity  of  the  enterprise; 
taxes  would  be  determined  in  the  same  way  as  before;  the 
manager  would  be  limited  in  the  amounts  he  could  pay  in 


242       ELEMENTS  OF  ECONOMIC  THEORY 

rent,  interest,  and  wages  to  the  increase  in  value  of  his  product 
resulting  resi^ectively  from  land,  capital,  and  labor ;  and  the 
actual  payments  he  could  he  compelled  to  make  would  approach 
these  limits  as  the  landlord,  capitalist,  and  wage-worker  found 
greater  or  less  difficulty  in  disposing  of  what  they  had  to  sell. 
The  cases  numbered  from  5  to  8  present  the  same  variations 
in  ownership  and  possibilities  for  bargains,  except  that  in 
them  legal  persons — corjjorations — each  of  which  may  be  com- 
posed of  many  men  and  women,  are  substituted  for  the  indi- 
viduals— natural  persons — of  the  first  four  cases.  In  these  last 
cases,  therefore,  the  number  of  persons  concerned  in  the 
various  bargains  may  be  indefinitely  lai'ge.  For  example,  take 
the  case  of  a  railroad  company  that  hires  thousands  of  work- 
ers, borrows  millions  of  dollars,  leases  thousands  of  miles  of 
railway  and  thousands  of  cars  from  other  companies.  Here, 
also,  taxes  are  within  the  power  of  voters,  and  managers  make 
contracts  with  landlords,  capitalists,  and  wage-workers  for 
certain  payments  which,  during  a  period  of  years,  must  all  be 
paid  out  of  the  value  of  the  product  of  the  enterprise. 
Summary  of    All  of  tliis  bargaining  for  shares  in  the  products 

Conditions  .  . 

Affecting  Bar-  of  busiucss  enterprises,  after  taxes  have  been 

gains  for  Shares  .  . 

of  Product,  deducted,  is  dependent  upon  the  valuations 
made  by  the  bargainers  themselves  and  by  the  valuations  of 
many  others,  which  result  in  market  values — called  market 
prices  when  expressed  in  money.  It  is  essential  to  remember, 
also,  that  individual  values  depend  upon  the  two  elements  of 
absolute  utility  and  quantity.  Tlie  more  imperative  the 
human  want  that  a  utility  tends  to  satisfy,  and  the  less  the 
quantity  of  the  appropriate  utility  available,  the  higher  the 
value  of  a  unit  of  it.  On  the  other  hand,  the  less  imperative 
the  want  and  the  greater  the  quantity  of  the  appropriate  utility, 
the  less  its  unit  value.  These  two  elements  may  be  briefly  re- 
ferred to  as  the  quality  and  quantity  elements  of  utility  in  value. 

With  this  re-presentation  of  the  elements  of  value  in  mind, 
note  the  following  combinations  of  the  factors  in  production 
as  they  affect  the  sharing  of  the  iDroduct  in  a  given  industry. 


SHARING  THE  PRODUCT  243 

rOM^atural  resources    suitable    for   the   piu-pose^  Relatively  small 
a, -ui  relatively  abundant f\     share  of  product. 

Suitable  capital  relatively  abundant ^    ^share^of  product. 

,      Laborers  qualified    for    the    work   relatively THelatively  large 

scarce \     share  of  product. 

^       ,  1                         1  X-     1  \  Relatively  small 

,       Capable  managers  relatively  many j     ^j^^^.^  ^^  product. 

II 

Suitable  natural  resources  relatively  scarce \     ^^^^^^i  product 

Suitable  capital  relatively  abundant |  ^^^^1  product. 

Efficient  workers  relatively  many {  ^^aS  product. 

Capable  managers  relatively  many ]  ^fharrof  product. 

Ill 
Suitable  natural  resources  relatively  abundant  |  ^f^ale^of  product 

Suitable  capital  relatively  scarce j  ^f^^ro  ^I  proluct. 

Efficient  workers  relatively  plenty ]  ^^^^S  j^JSuct. 

Capable  managers  relatively  many |  ^^^^^^f  product. 

IV 

Suitable  natural  resources  relatively  abundant  ]     ti^are^of  Droduct 

Suitable  capital  relatively  abundant ]  ^^^^^^  ^^i^duct. 

Efficient  workers  relatively  many ]  ^f^^^f  ^^^^^^^ 

Capable  managers  relatively  few |  ^f£^^f  ^S,t. 

Besides  the  above  combinations,  it  is  evident  tliat  there  may 
be  many  more  formed  by  any  two  of  the  factors  being  scarce 
relatively  to  the  other  two,  and  by  any  three  being  scarce 
relatively  to  the  other  one.  IIow  many  of  all  these  mathe- 
matically possible  combinations  we  can  find  illustrations  for  in 
the  actual  business  enterprises  with  which  we  are  familiar  is 
an  interesting  question. 


244       ELEMENTS  OF  ECONOMIC  THEORY 

Suggestive     ^-  What  do  you  know  about  the  rent  of  land  in 
Questions,     ^j^e  busiest  part  of  a  town,  or  city? 

2.  Suppose  you  wished  to  raise  various  garden  products, 
and  that  a  sandy  hillside,  far  from  a  town,  was  offered  you 
for  nothing,  and  an  equal  area  of  fertile  land  near  the  town  for 
ten  dollars  per  acre  each  year ;  which  would  you  take?     Why  V 

3.  How  ai'e  general  managers  of  railways  paid  in  comparison 
with  section  hands?     Why? 

4.  How  are  college  presidents  paid  in  comparison  with 
country  school  teachers?     Why? 

5.  How  are  skilled  workers  paid  in  comparison  with 
unskilled?    Why? 

6.  Do  you  know  of  any  cases  of  highly  trained  doctors, 
lawyers,  teachers,  engineers,  or  hand-workers  of  any  kind,  who 
can  barely  get  a  living?    Why? 

7.  What  is  the  tendency  of  the  increase  of  electric  street- 
car lines  from  large  cities  and  towns  to  suburbs,  towards 
raising  or  lowering  the  yearly  rental  and  the  price  of  good 
residence  property  within  a  mile  or  two  of  the  business  cen- 
ters?   Why? 

8.  What  is  the  effect  of  the  same  lines  upon  the  rental  and 
price  of  residence  property  in  the  suburbs?    Why? 

9.  What  has  been  the  tendency  of  rents  of  agricultural  pro- 
perty in  England  and  New  England  during  the  last  twenty-five 
years?  Why? 

10.  Do  you  know  of  any  cases  where  natural  resources  suit- 
able for  a  certain  kind  of  product  are  growing  scarce?  Illus- 
trate. 

11.  Of  any  cases  where  such  natural  resources,  though  still 
actually  abundant,  are  made  scarce  to  the  general  public 
through  the  monopoly  ownership  of  a  few  men?    Illustrate. 

,     ]  2.  Show  that  these  two  kinds  of  scarcity  give  the  owners 
the  same  kind  of  power  in  sharing  the  product. 

13.  Do  you  know  of  any  cases  where  laborers  suitable 
for  a  certain  kind  of  work  have  been  made  purposely  scarce? 
Illustrate.     Why? 


SHARING  THE  PRODUCT  245 

14.  Have  any  cases  occurred  to  you  in  reading  and  answer- 
ing the  above  questions  which  can  not  be  exphiined  fully  by 
the  various  combinations  suggested  above  which  afEect  bar- 
gains for  shares  in  the  product?  If  so,  state  the  cases  and 
your  difficulties. 

15.  How  may  rent,  interest,  wages,  and  profits  all  be  higher 
in  one  country  than  in  another? 

At  first,  it   would  seem  that  only  two  things 

How  a  Poor  '  ,  ,i  i         .   i 

Living  may     were  neccssary  to   make  all  connected  with  a 

Result  from  an  .  ■,,     n.         .  i-    ,      ,•  »    i      • 

Abundance  of    busiucss  wcll  Oil  SO  far  as  tlic  Satisfaction  of  their 
wants  is  concerned.     These  two  things  are :  (1) 
that  there  should  be  a  large  product  in  goods,  and  (2)  that 
there  should  be  a  fair  division  of  this  product  among  all  con- 
nected with  the  enterprise. 

If  the  goods  produced  by  a  single  person  or  business  were 
various  enough  to  satisfy  all  the  wants  of  the  persons  con- 
cerned, the  fulfilment  of  the  two  conditions  above  would 
suffice.  During  the  colonial  days  in  the  United  States,  and 
during  the  period  of  the  Home  System  of  industry  in  Eng- 
land, we  have  seen  that  this  state  of  things  was  more  nearly 
realized  than  is  true  to-day.  The  more  food  people  raised, 
the  more  clothing  they  made,  and  the  more  services  they 
rendered  each  other  in  their  homes,  the  more  comfortable 
they  were  if  they  were  fairly  taxed. 

But  now  those  concerned  in  a  special  business  find  only  a 
few  of  their  wants,  at  the  most,  satisfied  by  their  own  product. 
The  bulk  of  this  product  is  for  sale,  and  the  satisfaction  of 
their  other  wants  is  limited  by  the  goods  which  can  be  bought 
with  the  price  received.  Therefore,  the  real  product  that  is 
to  be  shared  is  not  the  more  or  less  abundant  goods  produced, 
but  the  market  value  of  those  goods.  Now,  market  value,  it 
will  be  remembered,  is  lowered  by  an  unusual,  or  excessive, 
quantity  of  any  commodity.  Tlierefore,  it  is  not  only  a  pos- 
sible, but  a  very  common,  experience  for  a  group  of  workers' 
to  do  their  very  best  to  produce  a  large  amount  of  their  special 
commodity  in  the  hope  of  an  abundant  reward,  only  to  find> 


246       ELEMENTS  OF  ECONOMIC  THEOEY 

this  product  valued  so  low  in  the  market  that  they  can  buy 
very  little  with  the  price  obtained.  It,  therefore,  is  not  only 
possible,  but  it  very  frequently  happens,  that  so  much  of  a 
certain  commodity  is  offered  for  sale  at  a  certain  time,  that  it 
has  very  little  market  value.  Fruit  growers  often  sell  the  scanty 
crop  of  one  year  for  more  money  than  they  get  for  the  abun- 
dant crop  of  the  year  before.  Eaisers  of  wheat  and  other 
cereals  have  also  had  similar  experiences.  Manufacturers, 
miners,  wage-laborers,  and  professional  men  have  likewise 
often  found  themselves  unable  to  sell  their  wares  and 
services  for  much  money  because  these  products  were  so 
abundant. 

It  is,  therefore,  plain  that  the  economic  purpose 

Not  mere  Qaan-  \  •        -     ^        -i  ■, 

tity  of  Goods   of  cverv  productivc  enterprise  is  fundamentally 

but  a  Valuable  ....         ,  .,,  ,  ,       ^  ■,  ^ 

Product  De-  to  Create  utilities  that  will  be  valuable — the  more 
valuable  the  product  the  greater  possible  reward 
for  all  concerned.  The  interests  of  those  who  furnish  natural 
resources,  capital,  management,  and  ordinary  labor  j^ower,  are 
identical  to  this  extent — to  make  the  total  jiroduct  as  valuable 
as  possible  for  a  given  expenditure  of  the  factors  of  produc- 
tion. But,  in  every  special  enterprise,  the  interests  of  those 
who  furnish  these  factors,  if  all  are  different  men  or  groups  of 
men,  are  directly  opposed  to  each  other  when  it  comes  to 
sharing  this  value. 

Are  the  Inter-  "^^^  statement  is  oftcu  made  in  public  print 
ests  of  Capital- ^]-^r^^   there  ought  to  be  no   conflicts   between 

ists  and  Labor-  o 

ers  Identical?  emjaloycrs  and  employees,  because  one  can  not 
produce  without  the  other,  and,  therefore,  their  interests  are 
identical.  The  above  discussion  shows  us  just  how  far  this  is 
true.  Using  the  word  "capitalist"  now  in  the  broad  sense  of 
landlord,  manager,  and  owner  of  capital  in  a  true  sense — which 
three  functions  the  capitalistic  employer  often  unites  in  him- 
self— and  "laborer"  as  contrasted  with  him,  the  interests  of  the 
capitalist  and  the  laborer  are  identical  in  desiring  a  total 
product  of  maximum  value.  Their  interests  are  diametrically 
opposed  to  each  other  when  that  value  is  divided. 


SHARING  THE  PRODUCT  247 

The  National  ^^^0111  the  poiiit  of  vicw  of  the  people  of  a  na- 
DivideiKi.      ^[qi^  taken  as  a  whole,  so  far  as  they  produce  all 
they  use  and  do  not  dispose  of  a  surplus  to  other  nations  for 
goods  in  return,  the  desirable  thing  economically  is  that  just 
as  many  and  various  goods  as  possible  be  produced.      The 
greater  the  quantities  and  varieties  of  goods  the  more  wants  of 
the  peojile  can  be  satisfied,  and  to  a  gi'eater  degree.     Make  ;, 
the  national  dividend  just  as  large  as  possible,  and,  if  there  is  i 
a  fair  division  of  the  goods,  everybody  will  be  economically  as  \ 
well  off  as  possible. 

But  if  the  nation  produces  certain  things  in  excess  of  its 
own  wants,  and  tries  to  exchange  them  with  other  nations  for 
their  goods,  it  is  economically  beneficial  to  the  first  nation  to 
have  its  products  not  only  great  in  quantity,  but  valuable. 
If  the  United  States,  for  example,  sells  food  products  in 
Eurojie  for  European  goods,  it  is  beneficial  to  have  those  food 
products  valuable,  and  the  goods  we  want  in  exchange  less 
valuable,  so  that  we  may  get  many  for  few. 

The  World  ^^om  the  Standpoint  of  the  world,  it  is  desirable 
Dividend.  ^^\^.^^  goods  of  just  as  many  kinds  as  possible  be 
produced  in  the  gi'eatest  possible  quantities  consistent  with  a 
wise  adjustment  of  these  quantities  to  human  needs.  That 
one  good  should  be  exceptionally  valuable  in  comparison  with 
others  would  be  to  some  personal  or  group  advantage,  but  not 
to  the  advantfige  of  all.  What  the  world  wants  economically 
is  that  there  should  be  enough  goods  produced  per  capita  so 
that  everybody  may  have  a  great  variety  of  wants  well  satisfied. 
The  world  welfare,  economically  considered,  varies  directly 
with  the  abundance  and  vai'iety  of  goods. 

National  welfare,  also,  so  far  as  the  nation  is  self-sufficing, 
varies  in  the  same  way.  But,  so  far  as  a  nation  engages  in 
international  trade,  its  welfare  varies  with  the  value  of  the 
goods  it  has  to  sell,  and  not  necessarily  with  their  abundance 
and  variety. 

The  individual  productive  enterprise,  likewise,  so  far  as 
those  concerned  with  it  use  their  own  product,  seeks  only  an 


248       ELEMENTS  OF  EuONOMIC  THEORY 

abundant  and  various  product.  But,  so  far  as  it  depends 
upon  an  exchange  of  its  own  product  for  other  products,  it 
desires  its  own  product  to  be  as  valuable  as  possible. 
I  Mere  abundance  and  variety  of  goods,  therefore,  tend 
I  toward  social  welfare.  Individual  advantage  over  the  rest  of 
society  varies  with  the  value  of  the  commodity  owned  by  the 
individual.  Therefore,  as  the  value  of  a  unit  tends  to  increase 
with  scarcity,  there  is  a  great  temptation  for  men  and  corpora- 
tions to  make  the  goods  in  their  possession  valuable  through 
limitation  of  quantity,  rather  than  by  an  improvement  in 
quality. 

The  Classes  of  ^^^om  the  forcgoiug  discussion  of  the  principles 

wifom  the^Kco-  "po^^  wliich  products  are  shared,  the  following 

""  oTthJ^ndf-""*  general  statement  will  be  seen  to  be  true.     So 

A.<£^  Jj^^^^^  Depends,  f ^j.  ^s  a  man  bargains  the  services  and  wealth 

^^^j^_^^ /which  he  produces  with  the  rest  of  the  world  in  return  foi 

',i^ct^  other  services  and   forms  of  wealth,   four  classes  of  person? 

;^/ affect  the  result: 

t  I     1,  Himself.    He  can  not  receive  goods  from  others  unless  h€ 
has  goods  to  give  in  exchange. 

2.  Others  who  are  producing  the  same  kind  of  commodity 
as  his.  He  may  produce  a  commodity  which  ordinarily  men 
feel  a  gi'eat  need  for,  but,  if  so  many  other  persons  are 
engaged  in  the  production  of  the  same  commodity  that  all  he 
can  produce  of  it  is  valued  very  lightly  by  the  rest  of  the 
world,  he  can  get  but  few  of  the  goods  of  others  in  return. 

(3.  Persons  who  are^jnodu^cing  the  ^ods  he  is  to  get  Jn 
exchange^  for  his  own.  Upon  their  skill  and  faithfulness  in 
producing  goods  suited  to  his  need  depends  the  ultimate  satis- 
faction of  his  want. 
4.  Persons  who  are  jjroducingLtkeL-sameJdndsjif  goods— aa. 
those  he  actuallj^getsJ:a__exchangeJfflLJiis^;0^  If  few  per- 
sons,  relatively  to  the  needs  of  men,  are  engaged  in  the  pro- 
duction of  the  goods  he  desires,  they  may  be  valued  so  highly 
that  he  can  get  but  few  of  them  for  his  own  product.  On  the 
contrary,  they  may  be  p'oduced  in  such  abundance  that  theii 


SHARING  THE  PRODUCT  249 

value  is  low,  and  his  product  may  be  exchanged  for  many  of 
them. 

Unless,  therefore,  a  man  can  foretell  not  only  his  own 
product  but  also  the  products  of  those  who  are  doing  the  same 
kind  of  work  as  himself,  and  the  product  of  all  those  engaged 
in  producing  the  goods  he  hopes  to  get  in  exchange  for  his 
own,  the  degree  of  satisfaction  that  his  efforts  will  secure  for 
himself  is  uncertain. 

Two  facts  stand  out  as  one  studies  the  details  of  distribu- 
tion. 

1.  In  these  modern  days,  when  almost  the  whole  output 
of  each  productive  enterprise  is  not  consumed  by  its  pro- 
ducer, but  sold  for  what  it  will  bring,  not  merely  maxi- 
inum_c[uan titles  of  goodsj^  but  goods  of  maximum  value  are 
desired.     The  value  of  the  product  limits  the  total  rewards 

for  the  producers  as  a  whole.  sX^a^  i  t- 

2.  The  share  of  this  total  ya]ue  that  each  grmipjpi_producCTs  ^j,,,^ 
gets  for  itself  is  largely  decitled  by  contractsjghich  are  affected^y^  ^u^ 
by  all_the  individual  and  social  causes  which  affect^  the^inar-:^,^*^-^^^ 
ke^tj)rice  of  any  commodity. 


250  ELEMENTS  OF  ECONOMIC  THEORY 


ly- 


-^  Chapter  IV 

SOME     CONSIDERATIONS    WHICH    AFFECT    PRODUCTION    AND 
DISTRIBUTION 

Some  Uses  of  ^^  should  never  be  forgotten  that  money  as  a 
Money.  mecUum  of  exchange  is  simply  an  instrument. 
Man  has  devised  it,  as  he  has  tools  and  machinery,  simply 
because,  by  its  use,  he  thinks  he  can  secure  more  consumption 
goods  than  without  it.  By  the  use  of  money,  man  divides 
into  two  parts  the  process  of  exchanging  the  commodity  he 
has  for  those  he  wants.  After  he  has  received  money  for  his 
own  commodity,  he  may  seek  the  commodities  he  desires  in 
any  market  at  any  time.  Money,  therefore,  enables  man  to 
separate  the  two  parts  of  his  exchange  by  a  few  hours,  days, 
or  even  years  of  time.  It  also  relieves  him  of  the  necessity  of 
finding  men  with  various  desired  commodities  which  they  are 
willing  to  exchange  for  his.  The  fact  that  the  silver  and 
gold  of  which  metallic  money  is  largely  composed  are  desired 
as  consumption  goods  in  the  form  of  plate,  gilding,  Jewelry, 
etc.,  must  not  be  permitted  to  disguise  the  fact  of  the  purely 
representative  character  of  these  metals  when  used  as  mone^y. 
Money  also  enables  a  man  to  compare  all  commodities  with 
each  other  quickly,  by  means  of  their  prices.  Goods  having 
the  same  market  price  are  often  exchanged  directly  one  for 
the  other  without  the  use  of  money  as  a  medium  of  exchange. 
Money  thus  used,  or  the  name  of  some  unit  of  money  thus 
used,  is  often  called  a,  common  denominator,  or  name,  of 
vakiga^, 

.    ,^    The  value   of  gold  compared  with  silver   and 

Changes  in   the  "  r 

Value  of  Money.  i\^q  yalues  of  both  in  comparisou  with  all  other 
commodities  vary  in  the  markets  of  the  world.  Just  as  other 
commodities  vary  in  value  with  reference  to  each  other,  in 


PRODUCTION  AND  DISTRIBUTION  251 

accordance  with  their  quality  and  quantity  elements,  their 
effective  utilities.  Let  some  gi'eat  new  social  need  for 
either  metal  be  discovered,  or  created  by  legislation,  and 
the  value  of  that  metal  tends  to  rise.  The  reverse  is 
also  true.  Increase  in  quantity  tends  to  low er__the-_valne 
of  money  metals  as  it  does  of  wheat,  and  conversely.  Mere 
coinage  of  either  metal  has  comparatively  little  to  do  with 
)"aising  or  lowering  the  value  of  that  metal  in  comparison 
with  the  other,  or  in  comparison  with  other  commodities. 
This  is  true  because  coinage  of  itself  is  onlyian  official  weigh  - 
ing  and  stamp  ingjof  metal  jo  Jhe  end  that  each  coin  may  be 
known  to  contain  a  certain  amount  of  metal  of  a  certain 
degree  of  fineness.  But  the  legislation  of  a  single  nation,  and 
to  a  greater  degree  the  legislation  of  many  nations,  may^greatly 
affectjthe  value  of  onejnetaLcompared  to  aiiother,  and  of  both^ 
compared  to  the  other  commodities  of  the  world.  This  is  true 
because  Jegislatiou  decides  whether  or  not  gold  shall  have,^  in  --^^^ 
addition  to  its  various  other  utilities  to  individuals  and  to 
society,  the  further  social  utility  of  a  legal  tender  medium  of 
exchange.  Legislation  decides  the  same  question  for  silver. 
Thus,  by  legislation,  the  quantity  of  a  metal  may  be  changed 
relatively  to  the  wants  it  is  allowed  to  help  satisfy.  This 
tends  to  change  its  value. 

l^his  possibility  of  change  in  the  value  of  money 
^rrhy'oe^erai'  ^^^    comparisou    with    all    other    commodities, 
•'^^^p^ifls.'"      whether  caused  by   legislation  or  independent 
'^  of    it,   is   a    fact  of    profound    economic   im- 

portance. Such  a  change  in  the  value  of  money  would  be 
the  same  thing  as  a  rise  or  fall  in  the  prices  of  all  things 
except  the  money  metals — what  is  called  general  rise  or  fall  of 
prices.  If  a  man  who  receives  money  for  his  own  product 
expends  it  immediately  for  other  goods,  a  general  rise  or  fall 
in  prices  makes  little  difference  to  him.  If  prices  are  low, 
he  sells  at  a  low  price,  but  also  buys  much  with  little  money. 
If  prices  are  high,  he  sells  for  a  good  price,  but  also  finds 
this  larger  sum  able  to  buy  no  more  goods  than  he  bought 


252       ELEMENTS  OF  ECONOMIC  THEORY 

with  little  money.  Suppose,  however,  that  a  seller  postponed 
for  a  few  years  the  purchase  of  goods  with  the  money  obtained 
for  his  own  product.  Now,  a  general  rise  in  prices  means  loss 
to  him,  because  he  sold  at  a  low  price  and  must  buy  at  a  high 
price.  On  the  other  hand,  a  general  fall  in  prices  means  gain 
to  him,  because  he  sold  at  a  high  price  and  can  buy  at  a  low 
price/  Every  person  who  saves  a  part  of  his  income,  puts  by 
something  for  a  rainy  day,  must  be  affected  favorably  or 
unfavorably  by  a  general  rise  or  fall  in  prices.  Great  changes 
in  general  prices,  that  is,  in  the  value  of  money,  are  sometimes 
detrimental,  sometimes  beneficial,  to  the  gi-eat  class  of  men  who 
allow  considerable  time  to  pass  between  their  sales  and  pur- 
chases. In  other  words,  their  real  share  in  the  distribution  of 
consumption  goods  is  larger  or  smaller  as  general  prices  rise 
and  fall. 

Another  great  group  of  men  who  are  also  effected  by 
changes  in  the  value  of  money  is  composed  of  ^debtors  and 
Ccreditors.  It  is  the  custom  foi"^  man  who  borrows  to  agree 
to  pay  back  at  some  future  time  the  same  number  of  dollars 
that  he  borrows.  If,  therefore,  a  great  change  in  the  value  of 
those  dollars  takes  place  between  the  time  of  borrowing  and 
repayment  he  must  return  in  reality  a  greater  or  less  quantity 
of  goods  tlian  he  borrowed.  If  prices  have  fallen,  the  dollars 
he  pays  back  will  buy  much  more  than  the  dollars  he  bor- 
rowed, and  conversely.  Not  only  are  individual  debtors  and 
creditors  affected  by  changes  in  money  values,  but  alt  Salaried/ 
men  whose  salaries  are  permanent,  all  savings  banks,  insur-j  • 
ance  companies,  loan  associations,  institutions  with  endow-i 
ments,  great  business  enterprises  that  have  issued  bonds,  and,  { 
finally,  all  towns,  cities,  counties,  and  states  that  are  in  debt, 
and  the  nation  itself,  are  likewise  affected  by  changes  in 
the  general  purchasing  power  of  money/  Every  taxpayer, 
whether  an  individual  debtor  or  creditor,  'or  not,  is  therefore 
affected  to  the  amount  of  his  responsibility  for  the  various 
debts  of  the  political  units  in  which  he  lives,  by  changes  in 
the  value  of  money. 


PRODUCTION  AND  DISTRIBUTION  253 

%^  Employers,  also,  who  pay  certain  sums  for  raw  materials, 
*  rent,  interest,  and  wages,  in  order  to  produce  a  certain  com- 
modity that  can  not  be  marketed  until  some  time  in  the 
future,  are  often  subject  to  disheartening  losses  because  the 
j3rice  of  their  product  has  fallen  between  the  time  when  they 
began  to  produce  and  the  time  they  offer  their  product  for 
sale.  During  a  period  of  falling  prices,  therefore,  managers 
are  often  timid  and  reluctant  to  undertake  the  making  of  a 
commodity  that  men  stand  greatly  in  need  of,  lest  its  falling 
price  should  involve  them  in  loss.  On  the  other  hand,  a 
period  of  rising  prices  often  brings  gains  to  an  employer 
which  encourage  him  to  the  point  of  recklessness  and  unsound 
business  methods. 

From  the  point  of  view,  therefore,  of  all  persons  who  allow 
some  time  to  pass^between  purchase  and  sale,  of  all  debtors 
and^reditors,  and  of  all  production  which  deniands  consider- 
able time  before  outlay  can  be  covered  by  sale  of  the  product, 
sp:'eat  chaufrea  in  the  value  of  money  are  undesirable.  Conse- 
quently, all  political  parties,  whether  committed  to  gold 
monometallism,  silver  monometallism,  national  bimetallism, 
or  international  bimetallism,  are  practically  agreed  upon  this 
point.  Their  differences  of  opinion  emerge  only  when  they 
begin  to  discuss  the  special  measures  by  which  a  greater 
degi'ee  of  stability  in  the  value  of  money  may  be  obtained. 
Important  '^^®  maximum  number  of  persons  in  a  demo- 
iacts.  cratic  country  ought  to  see  at  least  the  following 
facts  clearly : 

1.  What  men  want  ultimately  is  not  money,  but  consump- 
tion goods. 

2.  Money  2^er  se  is  merely  representative  of  other  goods. 

3.  The  value  of  money  is  subject  to  change,  both  because 
the  quantity  of  the  metals  of  which  it  is  composed  changes 
relatively  to  the  quantities  of  other  goods  in  the  Avorld,  and 
also  because  nations,  through  legislation,  arbitrarily  increase 
and  decrease  the  number  of  human  wants  that  money 
materials  already  in  existence  may  for  the  time  satisfy. 


254       ELEMENTS  OF  ECONOMIC  THEORY 

4.  Such  changes  in  value  directly  benefit  or  injure  all  per- 
sons who  allow  considerable  time  to  pass  between  the  acts  of 
selling  and  buying,  all  debtors  and  creditors,  both  private  and 
public,  and  all  business  enterprises  where  the  element  of  time 
in  production  is  an  imi^ortant  factor. 

5.  Justice  demands  legislation  which  will  secnre  the  maxi- 
mum stability  in  the  value  of  money,  in  comj^arison  with 
values  in  general. 

6.  The  money  question  is  one  which  often  tends  to 
place  one  man  on  one  side  and  another  on  the  other  side  for 
purely  personal  and  business  reasons. 

7.  There  has  been  in  recent  years,  and  may  for  a  long  time 
be,  much  honest  difference  of  opinion  about  the  immediate 
and  permanent  effects  of  various  monetary  policies. 

^'Suggestive     ^-  ^^  Capital  often  borrowed  for  longer  periods 
Questions.     ^]^an  thoso  for  which  wage  and  salary  contracts 
are  made?     Give  examples.   H'^-€c;' ]   "^.rwJA 

2.  Give  examples  of  long  leases  for  natural  resources. 

3.  In  cases  where  rent  and  interest  at  fixed  rates  have 
•been  promised  for  a  period  of  years  by  some  business,  and 
meanwhile  the  value  of  money  increases,  that  is,  general 
prices  go  down : 

a.  Is  the  fixed  annual  money  rent  and  the  fixed 
annual  interest  worth  more  or  less  in  goods  to  the 
landlord  and  capitalist  than  when  the  contracts 
were  made?     Why? 

I.  Is  it  harder  or  easier  for  the  business  to  pay  these 
rent  and  interest  charges  out  of  the  value  of  the 
product  than  when  prices  were  higher?  Give 
illustrations  of  these  two  cases. 

c.  When  general  prices  fall  in  such  cases,  show  that 
the  proportionate  shares  of  landlords,  capitalists, 
undertakers,  and  wage-earners,  in  the  product  of 
particular  businesses,  are  changed. 

4.  Suppose  long  time  leases  and  fixed  interest  charges  for  a 
term  of  years  are  as  in  3,  and  suppose,  also,  a  fall  in  the  value 


PRODUCTION  AND  DISTRIBUTION  2^5 

of  money — a  rise  in  general  prices— occurs,   answer  «,  5,  c  *^ 
for  these  conditions. 

5.  Suppose  statesmen  should  think  it  wise,  on  the  whole,  to 
pass  some  laws  which  tend  to  change  the  value  of  money ; 
should  contracts  already  made  be  subject  to  these  changes,  or 
only  new  contracts?     Why? 

G.  Show  that  a  wide  range  of  facts  must  be  considered 
before  one  can  master  the  money  question. 

7.  Is  it  possible  to  make  such  laws  about  money  that  justice 
will  be  done  to  all?  Explain, 
The  Law  of  If  a  man  has  a  vegetable  garden  in  good  cultiva- 
Returns.  tiou,  and  sets  out  to  raise,  next  year,  twice  as 
much  of  everything  as  he  raised  this  year,  he  may  possibly  do 
it  by  doubling  the  fertilizer  and  doubling  his  care  of  it  with 
spade,  hoe,  and  garden  hose.  If  he  succeeds  in  getting  double 
the  return  for  double  the  effort  and  expense,  the  return  per 
unit  of  outlay  is  the  same  as  before.  But  suppose  he  tries  a 
second  time  to  double  his  garden  products  from  the  same 
garden,  by  once  more  doubling  his  outlay.  The  return  is 
possibly  a  little  larger  than  before,  but  when  the  total  product 
is  divided  by  the  total  outlay  the  quotient  has  probably 
become  less  than  at  first.  The  proportional  return  has 
diminished. 

Farmers  are  familiar  with  this  fact.  It  also  becomes 
harder  and  harder,  by  the  old  methods,  to  get  a  ton  of  coal 
out  of  a  deepening  mine,  and  forests  and  fisheries  sometimes 
give  out  altogether. 

The  truth  at  the  bottom  of  these  common  experiences  is 
called  the  law  of  diminishing  returns,  and  has  been  stated  as 
follows:  "An  increase  in  the  capital  and  labor  applied  in  the 
cultivation  of  land,  causes,  in  general,  a  less  than  proportionate 
increase  in  the  amount  of  produce  raised,  unless  it  happens  to 
coincide  with  an  improvement  in  the  arts  of  agriculture."  ' 

In  this  statement  of  the  law,  nothing  is  said  about  what 
may  happen  if  the  increase  of  capital  and  labor  "coincides 

'Marshall,  Principles  of  Economics,  vol.  I,  p.  206. 


256       ELEMENTS  OF  ECONOMIC  THEORY 

with  an  improvement  in  the  arts  of  agriculture. "  Thus  far 
in  this  country,  it  may  be  said,  in  general,  that  this  coinci- 
dence has  been  frequent,  and,  besides,  new  lands  have  con- 
stantly been  taken  up,  so  that  our  food  and  raw  material 
supply  have  cost  us,  in  general,  less  and  less  effort  per  unit  of 
product  instead  of  more  and  more.  The  experience  of 
countries  like  China,  however,  has  been  different  from  ours, 
and  the  law  states  a  fact  of  great  importance  in  its  bearing 
upon  possible  limitations  of  quantity  of  various  goods,  and 
their  consequent  increase  in  value. 

To^emphasize  the  unprogressive  nature  of  industries  which 
the  law  supposes,  in  order  to  be  literally  true,  the  following 
statement  of  it  may  be  made : 

If  an  increasing  number  of  equally  efficient  men  use 
methods  and  capital  of  the  same  general  sort  upon  the  same 
piece  of  land  to  produce  goods  of  the  same  kinds,  a  time  will 
come  when  the  return  per  capita  will  begin  to  diminish  in 
quantity. 

Suggestive     ^'  -^^^  ^^^  ^^®  hypothescs  of  this  law  ever  true? 

Questions.  2.  Are  they  true  for  farming  in  one  generation 
compared  with  the  preceding? 

3.  Illustrate  for  both  answers. 

4.  Show  that  farmers  act  upon  the  truth  contained  in  the  law. 

5.  Show  that  the  law  is  as  true  of  lumbering  as  of  farming. 

6.  Show  that  it  is  true  of  minm^;  of  fishing.  Give  illus- 
trations in  the  last  three  cases.  --^  T'&--p.itZe^ 

7.  Does  this  law  mean  that  in  any  country,  or  in  the  world 
as  a  whole,  if  population  continues  to  increase,  an  increasing 
j)er  cent  of  the  total  population  must  necessarily  devot^  them- 
selves to  the  production  of  food  and  raw  materials?  yvVhy? 

8.  If  there  were  not  a  fact  as  the  basis  of  the  law,  show  that 
a  large  city  could  be  fed  indefinitely  from  the  products  of  a 
single  farm. 

9.  Does  the  law  mean  that  a  point  is  ever  reached  when  a 
farm  can  not  be  made  to  produce  an  extra  bushel  of  wheat  or 
barrel  of  potatoesf'^^xplain. 


PRODUCTION  AND  DISTRIBUTION  257 


r'i  'pyt-^ 


—^10.  Why  is"  truck  farming  carried  on  near  towns  and  cities? 
-—^11.  If  the  land  is  good  for  wheat,  why  not  raise  wheat? 
^  12.   Show  the    relation   between   the  law   of   diminishing '^>^-. 
returns  and  the  fact  of  rent.  s^ ..  (/a  -^^-^-^^/^/t,^!  ^/o^j, 

13.  Starting  from  the  raw  material,  does  a  manufactured 
product  cost  as  much  human  effort  now  as  formerly?  Sup- 
pose the  jiroportionate  share  of  effort  required  to  make  the 
machinery  is  added,  what  will  be  your  answer? 

14.  If  the  raw  materials  of  manufacture  should  cost  more 
and  more  effort,  and  the  manufacturing  processes  should  cost 
less  and  less  effort,  would  the  total  cost  of  manufactured 
goods  rise  or  fall?    Why? 

15.  In  what  sense  can  there  be  said  to  be  a  law  of  increas- 
ing returns  in  manufacture? 

■""Ai^rThere  Too  ^loscly  conuccted  with  the  fact  of  absolute  limi- 
Many  of  Us?  tatiou  upou  the  natural  resources  of  the  world, 
and  with  the  fact  also  of  possible  decreased  productivity  in 
proportion  to  effort,  of  any  particular  natural  resource,  is  the 
question  of  numbers  of  men.  Malthus  saw  only  two  alter- 
natives for  the  people  of  any  nation,  and  finally  for  the  world. 
One  of  these  was  a  voluntary  limitation  upon  the  number  of 
children  that  should  be  born.  The  other  was  increase  in 
numbers  until  the  per  capita  product  was  so  reduced  that  the 
most  unfortunate  were  cut  off  by  hunger,  pestilence,  and 
war.  It  is  an  historical  fact  that  numbers  have  been  kept 
lower  than  they  otherwise  would  have  been  by  both  of  these 
methods.  Among  the  most  intelligent  and  provident  people 
it  has  now  become  more  a  conviction  than  formerly  that  it  is 
the  right  of  every  child  born  into  the  world  to  have  a  reason- 
able opportunity  of  living  his  life  in  decent  comfort. 

The  children  of  the  most  ignorant  and  inefficient  of  our 
people  too  often  liavo  no  chance  to  earn  an  honest  living 
except  by  selling  their  unskilled  labor  power  for  productive 
purjjoses.  As  the  number  of  such  unskilled  workers  is  very 
large,  the  share  of  the  value  of  the  product  that  the  individual 
worker  has  been  able  to  got  by  contract  is  small.    The  curse  of 


258       ELEMENTS  OF  ECONOMIC  THEORY 

the  poor  man  is  his  poverty.  He  is  unable  to  get  a  high  wage 
because  there  are  so  many  of  him  for  the  unskilled  tasks,  and 
he  has  no  efficiency  for  other  tasks.  Chi  tlie  other  hand,  he  is 
unable  to  make  himself  efficient  because  he  gets  such  a  low 
wage  that  he  can  barely  keep  life  itself.  However  the  question 
of  population  as  a  whole  may  be  answered,  it  is  certainly  true 
that  there  are  now  too  many  of  the  unskilled  workers  for  their 
own  economic  good,  so  long  as  they  have  to  sell  their  services 
in  a  competitive  labor  market.  How  those  that  are  born  may 
become  more  efficient,  and  how  the  number  of  births  may  be 
restricted  by  moral  action  to  those  who  will  have  a  chance  to 
live  an  honest,  comjolete,  human  life,  are  two  problems  which 
stare  the  world  in  the  face. 
Slavery,  Self-  -^^  ^^^^  already  been  suggested,  the  conditions 
coo*'eration'  ^^'itlcr  which  men  work  affect  not  only  the 
^*<'-  amount  and  quality  of  their  product,  but  also 

the  process  of  dividing  the  product.  Perhaps  the  truth  in 
the  above  would  be  stated  better  by  saying  that  the  manner 
of  dividing  tlie  product  is  itself  an  important  condition  which 
variously  affects  the  activity  and  efficiency  of  workers,  and, 
consequently,  affects  favorably  or  unfavorably  the  product  to 
be  divided.  The  process  of  creating  and  the  process  of  divid- 
ing the  product  act  and  react  on  each  other.  In  the  table 
on  the  opposite  page,^  each  student  should  fill  out  the  blank 
spaces  for  himself. 

Suggestive     ^-  ^^  Self -employment  possible  to  the  extent  it 
Questions,     ^g^g  qj^q  hundred  years  ago?     Why? 

2.  What  is  the  precise  difference  between  profit-sharing  and 
cooperation? 

3.  If  profit-sharing  and  cooperation  result  in  a  larger  per 
capita  product  in  goods,  why  will  this  not  necessarily  result  in 
a  larger  per  capita  value? 

4.  Suppose  an  emjDloyer  deceives  his  employees  about  the 
amount  of  the  product  for  his  own  gain,  how  will  the  dis- 

^Adapted  from  one  devised  by  Professor  H.  C.  Adams,  in  an 
economic  syllabus  for  the  students  of  the  University  of  Michigan. 


PRODUCTION  AND  DISTRIBUTION 


259 


Under 


Slavery. 


Serfdom. 


Ordinary 

Wages 

System. 


The  Workman  Has 


1.  Civil  rights? 

2.  Political 
rights? 

3.  Pay,    how    de- 
termined? 

4.  Pt^5eih^in 
product? 


1.  What  interest 
in  quantity  of 
work? 

2.  What  interest 
in    quality    of 

.    work? 

fs.  What  care  foiq 
^     material? 


1.  Estimates  of 
sj'stems  from 
point  of  view 
of  product? 

2.  From  point  of 
view  of  work- 
er? 


i/;aCC.Jr  ^^yW^aef 


Piece 

Wages 

System. 


it- 


Profit- 
sharing. 


Coopera- 
tion. 


Pelf-em- 
ployment. 


covery  of  his  deceit  affect  the  future  success  of  the  profit-shar- 
ing enterprise?     Why? 

5.  If  the  employees  think  he  is  deceiving  them  while  he  is 
not,  what  will  be  the  effect  upon  the  success  of  the  enterprise? 
Why? 

G.  What  would  be  the  result  if  the  cooperators  in  a  business 
enterprise  were  not  honest  with  each  other? 


260       ELEMENTS  OF  ECONOMIC  THEOEY 

7.  If  they  were  alfhonest  but  suspicious,  each  of  the  other, 
and  of  their  managers? 

8.  What  are  some  of  the  requisites  of  success  in  profit- 
sharing  and  cooperation? 

9.  Show  whether  or  not  profit-sharing  and  cooperative 
enterprises  seek  the  economic  welfare  of  persons  not  engaged 
in  these  enterprises. 

10.  Show  that  they  may  hinder  the  economic  success  of 
persons  not  so  united. 

.      Trade-comi)i-  At  Icast  two  phases  of  the  present  forms  of 
Monopolies,    largc-scalo     production,     trade     combinations, 
department  stores,  trusts,  monopolies,  etc.,  should  be  seen  by 
every  one:     first,  most  of  these  enterprises  have  made  it  pos- 
sible by  economies  of  various  kinds — better  methods,  better 

.  machinery,  mere  bulk  of  business  under  one  management, 
^  lessening  number  of  men  required  for  a  given  amount  of  busi- 
["^  (  ness,  etc. — to  produce  goods  of  various  kinds  more  cheaply  than 
was  possible  before.  Generally  speaking,  this  result  is  desir- 
able. What  the  world  needs  is  more  goods  per  man,  not  fewer. 
That  the  per  capita  production  of  the  means  to  satisfy  human 
want  shall  increase  year  by  year  for  all  the  workers  in  the 
world  is,  so  far  as  it  goes,  greatly  to  be  desired. 

Second,  when  a  given  commodity  becomes  monopolized, 
the  managers  of  the  monopoly  not  only  have  it  in  their 
power  to  produce  a  given  unit  of  the  product  with  less 
efEort  per  worker,  but  they  also  have  the  power  of  making 
the  article  scarce  to  consumers,  and  thus  raise  its  value  to 
them.  How  high  the  value  to  consumers  may  be  raised  by 
keeping  the  article  scarce  in  the  markets  depends  upon 
the  kind  of  want  the  commodity  is  fitted  to  satisfy  and  the 
power  of  consumers  to  substitute  some  other  commodity  for 
it.  Monopolists,  therefore,  have  the  power  to  keej)  the  value 
of  their  product  higher  than  is  necessary  to  give  them  fair 
returns  for  their  productive  effort.  How  to  secure  for  con- 
sumers in  general  more  of  the  benefit  of  cheapened  produc- 
tion   made    possible    by  combination,   rather  than  how  to 


PRODUCTION  AND  DISTRIBUTION  261 

destroy  the  combinations  themselves,  is  the  problem  before  a 

truly  progressive  society. 

saggestire     ^-  Suppose  a  department  store  does  the  business 
Questions,     ^^jj^j;  ^jjg  formerly  done  by  ten  separate  stores : 

a.  How  would  the  ground  rent  of  the  one  large  busi- 
ness compare  with  the  total  rents  of  the  ten  small 
businesses?     Why? 

b.  Compare  in  the  same  way  cubic  space  needed. 

c.  Cost  for  heating,  lighting,  etc. 

d.  Number  of  cashiers  wanted. 

e.  Economies  in  buying,  in  transportation,  etc. 
/.  Stocks  of  goods  necessai'y  to  keep  on  hand. 
ff.  Wasted  time  of  workers. 

~"'  2"."irhat  classes  of  people  are  hai-med  by  department  stores? 

3.  Are  printers  harmed  by  the  introduction  of  type-setting 
machines?     Is  society  harmed? 

4.  What  has  been  the  effect  of  adverse  legislation  upon 
depai'tment  stores  and  machinery?     Why? 

5.  What  has  been  the  effect  of  similar  efforts  against  the 
consolidation  of  railways?    Why? 

6.  What  legislation  respecting  trade  combinations  is  neces- 
sary?   Why? 

7.  Which  is  more  important,  general  welfare,  or  the  wel- 
fare of  a  small  group? 

8.  How  could  corporations,  trade  combinations,  and 
monopolies  exist  without  the  making  and  enforcement  of 
laws,  contracts,  rights  of  private  property,  etc.? 

9.  Is  it  unjust  for  society  to  claim  for  general  use  a  share 
of  the  benefits  which  persons,  both  natural  and  legal,  gain 
through  the  agency  of  society?     Illustrate. 

Labor  organi-  ^^^  "^^^^  commou  form  of  labor  organization  in 
zations.        England  and  the  United  States   is   the   trade 
union,  which  Mr.  Sidney  Webb  defines  as  follows:    "A  trade, 
union,  as  we  understand  the  term,  is  a  continuous  association! 
of  wage-earners  for  the  purpose  of  maintaining  or  improving. \ 
t^^  conditiona  of  their  employment. ' '     There  are  many  points 


262       ELEMENTS  OF  ECONOMIC  THEORY 

of  dissimilarity  between  a  trade  union  and  a  medieval  craft 
gild,  of  which  the  former  is  often  thought  to  be  an  outgrowth. 
On  this  point,  also,  the  authority  just  quoted  gives  no  uncertain 
evidence:  "The  powers  and  duties  of  the  medieval  gild  have, 
in  fact,  been  broken  up  and  dispersed.  The  friendly  society 
and  the  trade  union,  the  capitalist  syndicate  and  the 
employers'  association,  the  factory  inspector  and  the  poor 
law  relieving  officer,  the  school  board  visitor  and  the  muni- 
cipal officers  who  look  after  adulteration  and  inspect  our 
weights  and  measures — all  these  persons  and  institutions 
might,  with  equal  justice,  be  put  forward  as  the  successors  of 
the  craft  gild."  ^ 

The  trade  union  consists  only  of  wage-earners,  while  the 
craft  gild  was  made  up  of  owners  of  land  and  capital,  man- 
agers, and  wage-workers;  the  trade  union  consists  of  wage- 
earners  in  the  same  occupation,  not  only  of  one  town  but  of 
many  towns,  while  the  typical  craft  gild  was  usually  confined 
to  the  industries  of  a  single  town;  the  trade  unions  have 
gained  political  power  but  slowly,  while,  from  the  first,  mem- 
bers of  gilds  were  influential  citizens  of  then-  towns  and  finally 
became  politically  dominant. 

Within  recent  years,  as  the  solidarity  of  the  interests  of 
great  employers  has  grown  greater,  there  has  been  a  marked 
tendency  toward  a  parallel  concentration  of  labor  organiza- 
tions.    Illustrations  of  this  tendency  are  the  organizations 
/.already   mentioned:    the  Knights   of   Labor,   the   American 
***^*'    Federation  of  Labor,  and  the  American  Railway  Union.     The 
f^j''   '■fast  of  these  antagonized  the  existing  trade  unions  somewhat, 
and  has  now  taken  the  form  of  the  Social  Democracy,  a  new 
•   political  party. 

One  fundamental  function  of  labor  organizations  has  been 
performed  in  connection  with  the  wage  contract.  An  indi- 
vidual wage-earner  is  often  not  the  equal  of  his  prospective 
employer  in  knowledge  of  the  value  of  his  service  to  produc- 
tion, and  is  usually  unable  to  withhold  his  services  from  con- 
^History  of  Trade-Unionism,  pp.  17,  18. 


PRODUCTION  AND  DISTRIBUTION  203 

tract  very  long,  because  he  and  his  family  would  then  suffer 
from  hunger.  In  knowledge  and  in  power  to  refrain  from 
the  bargain,  therefore,  the  single  wage-worker  is  often  not  the 
equal  of  a  large  employer,  and  may  consequently  be  made  to 
accept  an  unfavorable  wage  contract.  A  combination  of  a 
large  number  of  workers  in  the  occupation  may  make  the 
highest  intelligence  of  any  member  of  the  union  common 
property,  and,  by  helping  each  other,  they  can  withhold  their 
services  from  a  wage  contract  for  a  longer  time  than  is  pos- 
sible to  a  worker  acting  alone.  Thus,  by  what  is  called 
collective  bargaining,  wage-workers  have  sometimes  secured  a 
larger  share  of  the  total  product  of  an  enterprise,  and  more 
favorable  conditions  and  hours  of  employment  than  would 
otherwise  have  been  secured. 

Another  very  common  function  in  unions  is  their_b£nefit 
function.  By  means  of  accumulated  funds,  by  organization 
for  mutual  help,  and  by  strengthening  the  ties  of  human 
brotherhood  between  their  members,  the  sick,  the  unfortunate, 
and  the  unemployed  in  trade  unions  are  greatly  aided. 

Again,  trade  unions  have  been  and  are  highly  educational. 
Of  English  unions  it  is  said:  "The  student  of  Democracy  is 
always  deploring  the  narrow  range  of  observation  and  experi- 
ment afforded  by  the  brief  histories  of  the  few  modern  repub- 
lican states.  To  him,  the  trade  union  world  offers  the 
century-long  experience  of  a  thousand  self-governing  working- 
class  communities,  with  unrestricted  capacity  for  adaptation 
and  change.  The  innumerable  variations  in  the  structure  of 
these  free  democracies,  the  complexities  and  divergencies  of 
their  constitutions,  their  elaborate  devices  for  preserving  a  due 
balance  of  power  between  the  executive  and  the  members,  the 
relation  of  their  central  to  their  local  governments,  their 
financial  checks  and  counter  checks,  their  use  of  the  Mass 
Meeting,  the  Council  of  Delegates,  the  Ballot,  the  Initiative, 
and  the  Referendum,  alike  in  the  appointment  of  otficers, 
executive  government,  the  decision  of  policy,  and  the  enact- 
ment of  laws — in  short,  their  i)rolonged  trial  of   tlie  best- 


264  ELEMENTS  OF  ECONOMIC  THEORY 

known  machinery  of  representative  government,  and  their 
frequent  invention  of  new  forms  and  devices  for  the  better 
administration  of  their  little  republics, — all  afford  unrivalled 
material  for  generalizations  full  of  significance  to  the  philos- 
opher and  to  the  statesman."  ^  If  the  record  of  their  experi- 
ences is  thus  valuable  to  the  philosopher  and  to  the 
statesman,  it  must  be  clear  that  to  the  trade  union  members 
themselves  the  same  experiences  must  all  along  have  been 
highly  educational. 

In  one  important  particular,  however,  trade  unions  have 
been  powerless,  and  must  continue  so.  So  long  as  employers 
can  go  out  of  business  at  will,  trade  unions  can  not,  by  col- 
lective bargaining,  continue  to  secure  for  wage-workers  so 
much  of  the  total  value  of  the  product  as  to  leave  nothing  for 
the  manager,  the  owner  of  capital,  and  the  owner  of  land. 
The  wages  which  can  be  jsaid  permanently  in  any  business 
must  always  be  considerably  less  than  the  total  value  of  the 
product.  Some  wage-workers  think  the  question  as  to  the 
amount  of  their  wages  is  dependent  only  upon  the  employer's 
will.  Within  certain  limits,  this  is  sometimes  true,  but, 
generally  speaking,  unless  trade  unions  can  help  the  business 
enterprises  with  which  they  are  connected  to  increase  con- 
tinually the  total  value  of  the  product,  there  is  a  maximum 
limit  to  the  wages  which  the  strongest  trade  union  can  secure 
for  its  members. 
The  Eight-  '^^^^  widespread  movement  for  a  general  eight- 
HourDay."  hour  day  for  wage-earners  gains  much  of  its 
strength  from  a  growing  appreciation  by  many  people  of  all 
classes  that  leisure  is  necessary  for  men  that  they  may  live  a 
true  human  life.  We  have  seen  that  sunlight  and  fresh  air, 
and  the  sight  of  clouds  and  flowers,  of  green  turf  and  trees,  of 
lake  and  river  and  ocean,  tend  to  satisfy  real  wants  of  man, 
and,  therefore,  possess  utility  for  him.  The  same  is  true  of 
social  intercourse  with  his  fellows,  of  the  sight  of  noble  build- 

iWebb  and  Webb,  pp.  475,  476. 

2Rae,  Eight  Hours  for  Work— 18di,  The  MacmiUan  Co.,  New  York. 


•     PRODUCTION  AND   DISTRIBUTION  265 

ings  and  fine  pictures,  and  of  the  opportunity  to  read  from 
books,  which  are  now  accessible  to  all  through  public  libraries. 
If  a  man  has  no  time  to  appropriate  these  manifold  utilities 
that  are  within  his  reach,  he  fails  to  have  important  gToups  of 
wants  satisfied  that  might  be  satisfied  with  no  increase  in  his 
daily  wage.  Such  consumption  is  of  that  social  sort  which, 
by  enriching  one  man's  life,  does  not  make  another's  poorer. 
The  eight-hour  day  movement,  therefore,  is  a  concrete  expres- 
sion of  a  growing  demand  that  wage-earners  shall  have  the 
opportunity  to  enjoy  the  utilities  that  are  within  their  grasp. 

We  may  also  look  at  the  movement  from  the  side  of  produc- 
tion. Most  employers  at  once  ask  the  question — can  my  em- 
ployees'produce  as  much  in  eight  hours  as  in  ten,  or  twelve? 
In  all  businesses  where  this  question  can  be  answered  in  the 
affirmative,  there  can  be  no  valid  objection  to  a  reduction  in 
hours.  In  businesses  where  a  negative  answer  must  be  given, 
the  problem  to  be  solved  may  be  stated  in  this  form :  Are  the 
various  classes  of  persons  concerned  willing  to  sacrifice  some- 
thing from  the  value  of  their  immediate  product  for  the  sake 
of  being  able,  with  greater  leisure,  to  enjoy  more  keenly  the 
various  opportunities  for  satisfaction  which  are  already  pos- 
sible to  them? 

In  cases  where  a  shorter  day  results  in  a  lessened  product, 
there  is  also  the  question  of  deciding  upon  whom  the  loss  will 
fall,  whether  upon  all  the  groups  of  persons  concerned  in  the 
enterprise  in  due  proportion,  or  upon  some  one  group  unduly. 

From  the  point  of  view  of  both  production  and  consumption 
at  once,  it  may  be  said  that,  if  a  general  reduction  in  the 
hours  of  Avork  results  in  a  general  per  capita  reduction  of  the 
value  of  the  product,  there  must  inevitably  be  less  per  capita 
to  consume. 
/^^'^  American  interferences  with  the  trade  between 

^     A  Word  about       .    .  „    , ,        tt^    ..     n    r-c,     i  i   ii  -i.'  t 

tiioTariflr      Citizens  of  the  Lnited  States  and  the  citizens  of 
other  countries  have,  as  we  have  ah-eady  seen,  a 
long  ancestral  line  in  similar  restrictions  imposed  by  the  colo- 
nies upon  intercolonial  trade,  by  Parliament  upon  English  trade 


2G6  ELEMENTS   OF   ECONOMIC  THEORY    ' 

with  the  rest  of  the  world,  by  medieval  towns  upon  intertown 
trade,  and  by  gilds  upon  the  trade  of  persons  who  were  not 
gild  members.  These  restrictions  upon  private  trade  and 
contract  have,  at  their  best,  had  the  sincere  motive  of  seeking 
the  welfare  of  the  whole  group  which  imposed  them.  At- 
their  worst,  they  have  been  intended  for  the  gain  of  some  at 
the  exjDense  of  others.  Even  when  honestly  intended,  their 
remote  effect  upon  the  general  welfare  has  often  and  often 
been  far  different  from  what  was  expected.  It,  therefore, 
seems  necessary  that  every  intelligent  jDerson  should  be  able  to 
answer  for  himself  many  questions  similar  to  the  following 
before  he  considers  himself  well  informed  upon  the  tariff  ques- 
tion. 

1.  What  is  the  necessity  at  present  of  any  restriction  upon 
the  international  trade  of  the  United  States? 

2.  Are  there  any  business  enterprises  which  would  be 
ruined  by  a  sudden  abolition  of  all  tariffs?     Why? 

'  •  f3.  What  is  the  precise  difference  between  a_tariff  for  revenue 
and  a  jH-otective  taiiff? 

4.  How  does  a  protective  tariff  affect  the  total  production 
of  goods  in  a  country  which  imj)Oses  it? 

5.  How  does  it  affect  the  total  value  of  the  national 
product? 

6.  How  does  it  affect  the  distribution  of  the  national 
product,  or  income? 

7.  What  is  the  number  of  persons  engaged  in  industries 
that  are  protected  compared  with  those  engaged  in  other 
industries? 

8.  Ai-e  wages  in  the  protected  industries  high  because 
wages  in  other  industries  are  high,  or  vice  versa,  or  for  neither 
reason? 

9.  Would  our  industries  ever  have  become  diversified  with- 
out a  protective  tariff?     Give  reasons. 

10.  Are  industries  in  the  newer  parts  of  our  own  country 
becoming  diversified  without  a  protective  tariff  between 
states?    Illustrate. 


"^y     '     PRODUCTION   AND  DISTRIBUTION  267 

11.  Is  this  argument  sound:  "We  are  prosperous,  we  have 
had  a  protective  tariff,  therefore  our  jirosperity  is  due  to  the 
tariff?     Give  reasons. 

12.  If  it  is  wise  to  protect  some  infant  industries,  must 
they  always  be  protected?  When  is  the  protection  to  be 
Avithdravt'n?  What  are  the  practical  difficulties  in  the  way  of 
withdrawing  such  protection? 

13.  May  a  person  opijose  a  tariff  for  economic  reasons,  and 
support  it  for  political  reasons?     lUustrate. 

1-i.  May  the  converse  be  true?  Ilhistrate.  In  these  cases 
what  will  be  the  resultant  opinion? 

15.  What  is  tlie  effect  upon  business  of  making  the  tariff 
question  a  political  issue  once  in  four  years? 

16.  How  can  this  be  avoided? 

17.  Are  the  economic  policies  of  other  countries  subject  to 
such  political  changes  as  ai'e  frequent  in  the  United  States? 
Give  illustrations. 

18.  Does  a  tariff  give  a  country  an  increasing,  or  even  a 
steady,  revenue  in  times  of  war  and  emergency?     Why? 

19.  Do  men  pay  tai'iff  dues  in  proportion  to  their  ability  to 
pay?     Illustrate. 

20.  Is  the  tariff  question  a  simple  one?     Give  reasons. 

21.  Is  political  economy  mainly  a  study  of  the  tariff  ques- 
tion?    Explain. 

22.  Show  that  the  immediate  and  remote  results  of  a  tariff 
bill  are  not  always  equally  beneficial.     Illustrate. 

2)3.  What  are  the  expenses  of  collecting  tariff  duties  iu 
proportion  to  the  revenues  obtained?     W^hy? 
Direct  compui-  Iinpoi"tant  as  the  question  of  the  tariff  is  to  tho 
Borycontiibu-  people  of  ^hc  United    States,  both   from   the 

tioiiK  for  Si>cial  J-        i  ' 

rurpos«-H.  point  of  view  of  taxation  and  because  of  the 
effects  of  various  tariff  measures  upon  politics  and  business 
interests,  the  so-called  direct  taxes  of  states,  cities,  counties, 
towns,  villages,  school  districts,  park  districts,  sanitary  dis- 
tricts, etc.,  are  mucli  more  important  to  tlic  ordinary  citizen. 
For  example,  the  aver.igfe  annual  per  capita  amount  of  the  duties 


268       ELEMENTS  OF  ECONOMIC  THEORY 

on  imports,  from  1884  to  1893  inclusive,  was  S3. 35.  The 
school  tax  alone  in  many  local  districts  often  far  exceeds  this 
figure,  and  the  total  of  local  taxes  j)er  capita  is  sometimes  several 
times  this  amount.^  Especially  is  this  true  if  to  taxes  proper 
be  added  what  are  called  by  writers  on  finance,  fees  and 
special  assessments.  The  total  annual  public  expenditure  of 
some  cities  reaches  at  times  fifteen  and  even  twenty  dollars 
per  cajiita.  These  three  contributions,  taxes,  fees,  and  special 
assessments,  are  all  compulsory  under  certain  circumstances, 
and  are  collected  by  direct  authority  from  the  taxing  power 
— local,  state,  or  national.  Professor  Seligman  defines  them 
as  follows : 

"A  fee  is  a  compulsory  contribution  to  defray  the  total  or 
partial  cost  of  each  recurring  service  undertaken  by  the 
government  in  the  public  interest,  but  conferring  a  special 
advantage  on  the  fee -payer. 

"A  special  assessment  is  a  compulsory  contribution  paid 
once  and  for  all  to  defray  the  cost  of  a  specific  improvement 
to  property  undertaken  in  the  public  interest,  and  levied  by 
the  government  in  proportion  to  the  special  benefits  accruing 
to  the  property  owner. 

"Ajtax  is  a  compulsory  contribution  from  the  individual  or 
association  to  cover  the  expenses  incurred  by  the  government 
in  the  common  interest,  without  reference  to  special  benefits 
conferred."^ 

Postage  paid  to  the  national  government,  expenses  for 
articles  of  incorporation  and  charters  paid  to  state  govern- 
ments, and  water  taxes  paid  to  villages  and  cities  that  own 

'According  to  the  eleventh  census  of  the  United  States,  expenses 
of  national,  state,  and  local  governments  for  a  year  were  as  follows : 

National  Government §352,000,000 

States  and  Territories 77,000,000 

Local  Bodies 486,000,000 

Total      -      -      $915,000,000 
^Classification  of  Public  iSeveJiitcs— "Quarterly  Journal  of  Eco- 
nomics," April,  1893,  p.  821. 


PRODUCTION  AND  DISTRIBUTION  269 

their  own  water  systems,  are  examples  of  fees  as  above 
defined.  So  far  as  such  charges  are  in  excess  of  the  costs  of 
the  various  services  rendered,  such  payments  become  taxes. 

Sidewalks,  pavements,  and  sewers  in  villages  and  cities  ai'e 
usually  constructed  by  special  assessments  upon  the  owners  of 
adjacent  real  estate.  Here  again,  if  the  sum  collected  is  in 
excess  of  the  cost  of  the  improvement,  and  the  excess  is  not 
rebated,  it  may  become  a  tax. 

Taxes  are  justified  because  social  beings  cannot  live 
together  without  social  consumption.  How  much  social 
consumption  there  shall  be  is  determined,  in  a  democratic 
country,  by  the  voters.  So  long  as  individuals  control  pro- 
duction of  goods,  there  can  not  be  social  consumption  without 
contributions  of  goods  by  individuals.  As  the  benefits  con- 
ferred upon  the  individual  by  organized  society  are  invaluable 
to  him,  he  can  not  pay  for  them  even  by  giving  all  he  has. 
Still,  the  functions  of  government,  as  at  present  exercised, 
can  be  maintained  at  a  less  expenditure  than  the  total  of 
the  individual  incomes,  and,  therefore,  the  only  logical 
basis  for  payment  of  taxes  is  that  each  should  pay  in  pro- 
portion to  his  ability  to  pay.  If  one  goes  fai'ther  than 
this,  and  tries  to  specify  the  exact  rates  and  methods  of 
taxation  which  will  make  each  citizen  pay  in  proportion 
to  his  ability  to  pay,  the  task  attempted  is  one  for  the  wisest 
statesmen  and  students  of  finance.  Both  in  self-defense 
and  because  of  the  possible  good  to  be  done  to  society  as 
a  citizen  and  voter,  the  subject  of  taxation  is  worthy  of  pro- 
longed study. 

Suggestive     ^-  ^^  ^^^  sliould  bo  tho   amount  of  fees   and 

yuestions.  special  assessments  in  comparison  with  the  value 
of  the  services  rendered  and  benefits  conferred?     Why? 

2.  When  street  car  lines,  gas  works,  and  water  systems  are 
owned  by  private  persons,  or  corporations,  and  city  councils 
(ix  the  prices  at  which  tho  public  is  to  be  served,  should  the 
rate  be  higher  than  required  by  the  service  rendered,  and  the 
excess  paid  into  tho  city  treasury?    AVhy? 


X 


270       ELEMENTS  OF  ECONOMIC  THEORY 

3.  In  comparison  with  the  national  tariff  dues,  is  the  differ- 
ence of  one  cent  a  ride  on  the  street  cars  of  gi'eater  or  less 
importance  to  the  ordinary  wage-earner?     Give  reasons. 
->~  4.  When  should  public  property  be  exempt  from  taxation? 

5.  "When  should  church  property  and  the  property  of  pri- 
vate charitable  institutions  be  exempt? 
yC^  6.  If  one  man  owns  property  worth  $100,000,  and  another 

owns  property  worth  $1,000,  will  the  same  rate  of  tax  upon 
each  dollar^f  property  make  each  man  pay  in  proportion  to 
his  ability?''^  Why? 

7.  Should  men  pay  school  taxes  in  proportion  to  the  num- 
ber of  children  they  have?     Why? 

8.  What  are  the  difficulties  in  taxing  personal  property? 

9.  What  is  an  income  tax? 

10.  Show  how  taxation  sometimes  leads  to  bribe-giving  and 
bribe-taking? 

■  J)0/ '   A  \^^t)ll.  Wliat  other  sources  of  revenue,  if  any,  than  by  deduct- 
r-  i^^-     jjjg  something  from  the  total  product  of  individual  producers,""" 
do  governments  have? 

12.  Should  government  funds  be  exj)ended  for  faithful 
services  and  good  qualities  of  commodities  at  lugher  rates 
than  are  paid  for  these  goods  by  private  consumer sff^^JVhy? 

13.  Why  do  men  seek  so  earnestly  for  government  posi- 
tions?      '-'   •      :,        '  -  S^"^      --^^   ^    -f      :--    -  -     -^ 

14.  In  the  present  state  of  efficiency  and  honesty  in  the 
administration  of  various  political  units,  s|io:^d  gove/nmeuts 
undertake  more  or  fewer  functions?     Why?'*"^  f"  -''''■" 

-"-^"^io.  Do  added  responsibility  and  accountability  ever  develop 
greater  honesty  and  efficiency?     Explain, 

16.  Should  the  owner  of  a  mortgaged  farm  pay  taxes  on  the 
whole  value  of  the  farm?     Why? 

17.  Should  the  holder  of  the  mortgage  pay  a  tax  on  the 
mortgage? 

18.  Should  a  corporation  pay  taxes  on  both  its  stock  and 
bonds?     Why? 

19.  Should  bondholders  pay  taxes  on  their  bonds? 


PRODUCTION  AND  DISTRIBUTION  271 

20.  Should.a  man  know  from  year  to  year  about  what  his 
taxes  will  be?'    TThy? 

21.  Should  he  know  when  they  must  be  paid? 

22.  Does  it  make  any  difference  to  him  what  time  of  the 
year  ihey  must  be  paid?     '\\'hy? 

23.  If  a  man  refuses  to  pay  his  taxes  what  happens?     Why? 
'~'^A:.  Why  can  a  nation  demand  the  lives  of  its  citizens  to 

save  the  nation  from  invasion? 

25.  How  much  of  a  man's  income  and  property  may  be 
taken  in  taxes?     Why? 

26.  What  is  an  inheritance  tax?_ 

27.  What  is  a  progressive  tax? 

28.  Should  an  inheritance  tax  be  progi'essive?    Why? 


373  ELEMENTS  OF  ECONOMIC  THEORY 


Chapter  V 


COK^SUMPTIOX 


Kinds  of  Consumptiou  in  economics  means  primarily 
Consumption,  destruction  of  utility.  It  is  the  opposite  of 
production.  Consumption  may  hd  wasteful,  as^wheu  utilities 
are  destroyed  by  a  conflagration.  It  may  be  productive,  as 
in  the  case  of  raw  materials  which  lose  their  utility  as  raw 
materials  in  order  to  receive  greater  utility  in  a  finished 
product,  when  it  is  really  a  form  of  production.  Finally, 
utilities  may  be  appropriated  to  satisfy  tlie  wants  of  men. 
This  is  consumptiou  proper.  When  the  word  consump- 
tion is  used  without  explanation,  we  mean  this  last  form 
of  it.  To  obtain  the  means  wherewith  to  satisfy  his 
wants  and  the  wants  of  others,  man  puts  forth  all  his  efforts. 
When  utilities  are  destroyed  in  satisfying  human  wants,  the 
purpose  of  their  creation  is  fulfilled.  Man  is  the  beginning 
and  the  end  of  the  economic  process.  That  man  may  have  a 
more  abundant  life,  the  whole  complex  machinery  of  modern 
industrial  society  has  been  evolved  and  set  in  motion.  What 
man  primarily  wants  is  his  dinner,  not  merely  the  cookstove 
on  which  it  was  prepared;  clothing,  not  the  spindles  and 
looms  on  which  the  cloth  was  spun  and  woven;  pictures 
and  symphonies,  not  the  paint  brushes  and  musical  instru- 
ments by  which  they  are  produced.  Other  things  being 
equal,  the  world  welfare,  therefore,  varies  with  the  per  capita 
amount  of  consumption  goods.  From  the  economic  stand- 
point, a  man's  life  is  more  abundant  the  more  various  and 
the  better  adjusted  the  consumption  goods  he  enjoys. 

A  Penny       From  this  poiut  of  view,  the  j)roverb,  "A  penny 

Saved.        savcd   is  a  penny  earned,"  may  acquire  new 

meaning.     To  produce  consumption  goods  and  then  have  man 


CONSUMPTION  273 

consume  them  in  such  a  way  as  to  give  him  no  rational  enjoy- 
ment, leaves  human  want  just  as  unsatisfied  as  before.  To 
destroy  them  outright  brings  the  same  result.  But  to  save 
from  pm'e  waste,  or  unsatisfactory  consumption,  to  man's 
rational  enjoyment  a  utility  already  in  existence  is  as  much 
worth  while  as  to  produce  another  like  it  for  the  same  high 
purpose. 

Goods  to  the  value  of  more  than  $100,000,000  are  annually 
destroyed  by  fire  in  the  United  States.  By  means  of  fire 
insurance  companies,  this  loss  is  so  distributed  that  the  indi- 
vidual owners  are  not  impoverished,  but  this  ought  not  to 
disguise  the  fact  that  the  people  have  annually  just  this  much 
less  satisfaction  of  want  because  of  such  destruction. 

The  wastes  of  each  household,  because  of  throwing  away 
half-consumed  utilities,  cooking  which  does  not  bring  out . 
nutritive  qualities,  unwise  selection  of  materials,  etc.,  make 
an  enormous  aggregate  in  this  country.  A  better  knowledge 
of  the  nutritive  qualities  of  foods  and  more  skill  in  cooking 
may,  therefore,  make  the  incomes  of  the  American  people 
result  in  far  greater  welfare  than  at  present,  even  if  their 
incomes  be  not  increased.  To  have  some  real  part,  even  in 
one  family,  in  preventing  waste  and  unwise  use  of  the  con- 
sumption utilities  actually  produced  is,  therefore,  an  economic 
service  of  gi'eat  dignity. 
consum  tion  Skilful  mcu  of tou  get  an  article  produced  which 
asuemand.  ^j^g  public  had  uot  bcforc  known,  and,  there- ' 
fore,  had  never  consumed,  but  which,  once  made,  they  feel  a 
need  for  and  consume  freely.  Still,  it  is  also  true  that  the 
articles  men  consume  determine  very  largely  the  articles  that 
are  made,  and,  to  a  great  degi-ee,  the  conditions  under  which 
they  are  made.  AVe  are  familiar  with  this  truth  when  used 
by  opponents  of  prohibitory  liquor  legislation.  If  men  cease 
to  drink  alcoholic  drinks,  they  will  no  longer  be  compounded. 
This  truth  can  not  be  covered  up  by  retorting  that  liquors  can 
not  be  drunk  if  no  one  makes  them.  Both  facts  should  ho 
kept  in  mind.     Utilities   face  both  toward  production,  and 


274       ELEMENTS  OF  ECONOMIC  THEORY 

toward  consumption.  Production  and  consumption  react  on 
each  other,  stimulating  and  retarding  each  other,  througli 
utility.  Neither  can  long  exist  without  the  other. 
Consumers'  Kelji^g  ^^pou  this  powcr  of  consumption  to 
Leagues.!  influence  even  the  conditions  of  production, 
large  numbers  of  consumers,  especially  in  large  cities,  are 
forming  themselves  into  leagues  for  the  purpose  of  discour- 
aging the  purchase  of  any  article  which  is  made  in  unsanitary 
buildings  or  the  makers  and  sellers  of  which  are  inadequately 
paid.  These  leagues  rely,  in  the  main,  upon  two  methods: 
first,  they  make  "White  Lists"  of  such  manufacturers  and 
storekeepers  as  come  up  to  their  standard  of  a  "fair  house." 
Second,  they  put  a  brand,  or  seal,  of  some  kind  upon  all  arti- 
cles that  are  known  to  be  made  and  sold  under  humane  and 
healthful  conditions,  and  consumers  are  thus  enabled  to  avoid 
other  articles.  If  a  sufficient  number  of  consumers  can  be 
induced  to  act  in  thj^  way,  it  is  evident  that  finally  articles 
made  and  offered  for  sale  under  improper  conditions  will  lack 


Social  Con-  "^^^  ^^^J  ^^  ^^  possible  for  each  consumer  to 
sumption,  prevent  absolute  waste,  to  choose  between  a 
utility  which  debases  his  manhood  and  one  which  ennobles, 
and  to  help  to  make  the  conditions  under  which  others  produce 
and  sell  more  helpful  to  them,  but  there  is  yet  another  way  to 
make  the  goods  already  produced  contribute  more  to  the 
welfare  of  mankind  than  is  yet  common.  Many  goods  are 
relatively  permanent,  and  continue  to  satisfy  want  until  finally 
destroyed  by  the  tooth  of  time.  Of  such  a  nature  are  fine 
buildings,  statuary,  paintings,  and,  to  a  less  degree,  books. 
Still  other  goods  are  so  renewed  from  year  to  year  as  to  be 
permanent  and  often  of  growing  utility.  Of  such  a  nature 
are  parks,  beautiful  drives,  avenues  of  trees,  the  sight  of 
waterfalls  and  beautiful  landscapes.  Such  utilities  may  be 
consumed  by  the  owner,  in  selfish  isolation  from  his  fellows,  or 

^Kelly,   Aims  and  Principles  of  the  Consumers'  League — "The 
American  Journal  of  Sociology,"  November,  1899. 


CONSUMPTION  275 

with  infinitely  greater  satisfaction  in  company  with  them. 
"As  things  are,  the  first  impulse  of  the  man  who  becomes 
rich  is  to  hedge  himself  away  from  his  fellows ;  to  put  up 
barbed  wire  around  his  belongings ;  to  travel  by  a  separate 
class;  and,  generally,  to  hang  out  the  sign,  'Trespassers 
beware' — not  from  the  admirable  motive  of  being  alone  with 
nature,  but  simply  that  of  being  distinguished  from  the 
crowd.  .  .  .  We  have  the  common  phenomenon  in  the 
neighborhood  of  our  cities,  of  owners  building  walls  around 
thousands  of  acres,  with  the  intention  of  preventing  the  pub- 
lic from  enjoying  what  sm-ely  belongs  to  no  private  owner,  the 
sight  of  God's  Earth."  1 

Contrasted  with  this  kind  of  consumption,  we  have  that  of 
others  who,  by  means  of  their  open  picture  galleries,  free 
libraries,  unfenced  lawns  and  parks,  interchange  of  services 
in  social  settlements,  disinterested  public  services,  and  social 
consumption  in  many  other  ways,  are  demonstrating  that  the 
goods  we  now  have  might  contribute  to  the  wants  of  a  larger 
number  of  men  than  at  present  enjoy  them. 

s»Kffestive     ^'  ^ow  is  it  possible  for  a  person  or  family  to 
Questions.     \^q  ^qq  "saving,"  to  starvo  the  life  of  to-day  in 
order  to  lay  up  too  many  goods  for  the  future?   j^^  j£u>y'i--^^^**^ '*»*^'"^ 

2.  May  a  nation  consume  too  little-t)f  its  income  from  day^' 
to  day  and  invest  more  in  factories,  railways,  machinery,  etc., 
tlian  can  be  kept  at  work?     Explain. 

3.  Give  illustrations  of  the  effect  of  consumption  upon 
production  and  distribution. 

4.  Give  illustrations  of  social  consumption  in  your  own 
town  or  city. 

5.  Show  in  what  directions  it  may  be  increased. 

'^6.  Make  out  a  set  of  rules  to  guide  a  person  in  his  expendi- 
ture, having  in  mind  some  such  possibilities  of  choice  as  the 
following : 

'Smart,  Studies  in  Economics,  pp.  305-307—1895,  The  Macmillau 
Co.,  New  York. 


:  t  j-'^' 


ELEMENTS  OF  ECONOMIC  THEORY 

Between  satisfying  a  want  for  something  harmful 
and  something  helpful  to  manhood. 
Between  satisfying  a  want  for  something  helpful 
and  something  more  helpful  to  manhood. 

c.  Between  satisfying  wants  by  selfish  consumption 
and  social  consumption. 

d.  BetweenV.  saving    and  ^(Consumption    enough    to 
develop  normal^men  and  women. 

fT  e.  Between  extravagant  consumption  by  a  few  and 
Vi  moderate  consumption  by  many. 
•J^.  Write  a  letter  of  advice  to  young  men  and  women,  set- 
ting forth  the  conditions  under  which  they  may  be  reasonably 
sure  of  producing  goods  of  such  value  to  society  that  they  can 
get  goods  enough  in  return  to  secure  for  them  a  life  of  decent 
comfort. 

a.  "What    kind    of    efficiency   should    they  seek   to 
acquire?       /    'J^^ 
...     h.  Should  they  seek  an  occupation  that  is  already 
:         cro\Yded?     Why? 
c.  Suppose  all  occupations   are   crowded,   what   are 
they  to  seek  to  do? 

CONCLUSION 

1.  Look  up  the  list  of  questions  asked  by  members  of  the 
class  as  suggested  in  Lesson  XVII,  Part  I. 

2.  Answer  for  yourself  every  one  that  you  can. 

3.  Make  a  new  and  consecutive  list  of  all  the  questions  you 
can  not  answer. 

4.  Add  to  the  list  other  important  questions  which  nave 
been  raised  during  your  study  of  economics  but  not  answered 
to  your  satisfaction. 

5.  Keep  this  list  of  questions  in  some  convenient  place,  and 
look  at  it  from  time  to  time,  as  the  months  go  by,  whatever 
your  station  in  life. 

6.  Cross  off  such  questions  as  time  and  further  study  enable 
you  to  answer. 


CONSUMPTION  277 

7.  Add  to  the  list  such  new  questions  as  time  and  wider 
experience  compel  you  to  ask. 

8.  Keep  on  with  the  study  of  some  particular  questions  in 
which  you  are  especially  interested. 


APPENDIX 


The  following  tables  of  statistics  are  inserted  for  two 
reasons:  first,  because  they  throw  some  light  upon  one  or 
more  of  the  topics  discussed  in  the  text ;  second,  because  they 
furnish  data  for  further  exercises  in  graphic  statement.  Full 
scope  may  thus  be  given  to  the  ingenuity  of  pupils  in  devising 
the  best  methods  of  representing  statistical  facts  by  curves, 
bars,  masses  of  color,  circles,  etc.  The  special  talent  of  cer- 
tain pupils,  in  this  kind  of  work,  may  often  contribute  much 
to  the  good  of  all.  Some  of  the  statistics  may  also  be  dia- 
gi'ammed  by  each  pupil  with  profit. 

Additional  statistics  of  great  variety  may  easily  be  obtained 
by  reference  to  the  Statistical  Abstract,  and  to  the  authorities 
suggested  in  the  note  at  the  beginning  of  Part  III. 

Yearly  Cotton  Product  ^  of  the  United  States.  ^      '^ 


Year. 

Bales. 

Year. 

Bales. 

Year. 

Bales. 

1841 

1,688,675 

1860 

3,826,086 

1879 

5,057,397 

1842 

2,394,203 

1861 

No  report 

1880 

5,789,329 

1843 

2,108,579 

1862 

No  report 

1881 

5,435,845 

1844 

2,484,662 

1863 

No  report 

1882 

6,992,234 

1845 

2,170,537 

1864 

No  report 

1883 

5,714,052 

1846 

1,860,479 

1865 

2,228,987 

1884 

5,669,021 

1847 

2,424,113 

1866 

2,059,271 

1885 

6,550,215 

1848 

2,808,-596 

1867 

2,498,895 

1886 

6,513,623 

1849 

2,071,706 

1868 

2,439,039 

1887 

7,017,704 

1850 

2,415,2.57 

1869 

3,154,946 

1888 

6,935,032 

1851 

3,090,029 

1870 

4,352,317 

1889 

7,313,726 

1852 

3,352,882 

1871 

2,974,351 

1890 

8,655,000 

1853 

3,035,027 

1872 

3,930,508 

1891....  . 

9,035,000 

18.54 

2,932,339 

1873 

4,170,388 

1892 

6,700,000 

1855 

3,645,345 

1874 

3,832,991 

1893 

7,534,735 

1856 

3,056,519 

1875 

4,609,288 

1894 

9,900,000 

1857 

3,238,902 

1876 

4,485,423 

1895 

7,157,346 

1858 

3,994,481 

1877 

4,811,265 

31896 

8,757,904 

1859 

4,823,770 

1878 

4,073,534 

n897 

11,199,994 

'Year  ending  September  1. 

^Maimed  of  Statistics  and  StocJi;  Exchange  Handbook  for  1897, 
p.  418— Charles  11.  Nicoll,  New  York. 
»The  same,  for  1899,  p.  490. 


280 


APPENDIX 


Pig  Iron  Production  of  the  United  States.^ 


Year. 

Tons. 

Year. 

Tons. 

Year. 

Tons. 

21854 

736,218 

1869 

1,916,641 

1884 

4,097,868  / 

1855 

784,178 

1870 

1.865,000 

1885 

4,044,526 

1856 

883,137 

1871 

1,911,608 

1886 

5,683,329 

1857 

798,157 

1872 

2_,  854, 558 

1887 

6,417,148 

1858 

705,094 

n873 

2,560,963 

1888 

6,489,738 

1859 

840,627 

1874 

2,401,262 

1889 

7,603,642 

1860 

919,770 

1875 

2,023,733 

1890 

9,203,708 

1861 

731,544 

1876 

1,868,961 

1891 

8,279,870 

1863 

787,662 

1877 

2,066,594 

1892 

9,157,000 

1863 

947,604 

1878 

2,301,215 

1893 

7,124,000 

1864 

1,135,996 

1879 

2,741,853 

1894 

6,657,088 

1865 

931,582 

1880 

3,835,151 

1895 

9,446.308 

1866 

1,350,344 

1881 

4,144,254 

1896 

8,623,127 

1867 

1,461,626 

1882 

4,123.323 

n897 

9,652,860 

1868 

1,603,000 

lasa^.... 

4,593,510 

n898 

11,773,934 

^Manual  of  Statistics  for  1897,  p.  398. 
«1854  to  1872,  net  tons. 


31873  to  1898,  gross  tons. 

*Manual  of  Statistics  for  1897,^p.  451. 


Freight  Rates  on  Wheat,  by  Lake,  Canal,  and  Rail,  from 
Chicago  to  New  York,  1857-1898.1 


Average  Eates  per  Bushel.  | 

Calendar 
Year. 

Average 

Rates  pel 

'  Bushel. 

Calendar 
Year. 

By  Lake 
and 

By  Lake 
and 

By  All 

By  Lake 
and 

By  Lake 
and 

By  All 
Rail. 

Canal.' 

Kail. 

Itail. 

Canal.' 

Rail. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

1857  .. 

25.29 

1878 

9.15 

11  4 

17  7 

1858 

16.28 

1879 

11.60 

13.8 

17.3 

1859 

17.59 

1880 

12.27 

15.7 

19.9 

1860 

24.83 
26.55 

1881 

1882 

8.19 
7.89 

10.4 
10.9 

14  4 

1861 

14.6 

1862 

26.33 

1883 

8.37 

11.5 

16.5 

1863 

22.91 

1884 

6.31 

9.95 

13.125 

1864 

28.36 
26.62 
29.61 
22.36 
22.79 

1885 

1886 

1887 

1888 

1889 

5.87 
8.71 
8.51 
5.93 
6.89 

9.02 
12 
12 
11 

«8.7 

14 

1865 

16  5 

1866  .... 

n'i  74 

1867  .... 

=14  5 

1868...'.. 

29 

42.6 

15  ' 

1869 

25.12 

25 

35.1 

1890 

5.85 

8.5 

14.31 

1870 

17.11 

22 

33.3 

1891 

5.96 

8.58 

15 

1871 

20.24 

25 

31 

1892 

5.61 

7.55 

14.28 

1872 

24.47 

28 

33.5 

1893 

6.33 

8.44 

14.7 

1873 

19.19 

26.9 

33.2 

1894 

4.44 

7 

12.88 

1874 

14.1 

16.9 

28.7 

1895 

4.11 

6.95 

12.17 

1875 

11.43 

14.6 

24.1 

1896 

5.38 

7.32 

12. 

1876 

9.58 

11.8 

16.5 

1897 

4.35 

7.37 

12.82 

1877 

11.24 

15.8 

20.3 

1898 

4.42 

9.50 

11.55 

'Prepared  by  J.  C.Brown,  Statistician,  New  York  Produce  Exchange.    Quoted  id 
1898  Statistical  Abstract,  p.  359. 

slucluding  canal  tolls  until  1882.  but  not  Buffalo  transfer  charges. 
^Averages  of  officially  published  tariffs;  actual  rates  lower. 


APPENDIX 


281 


V  Prices  of  Pig  Iron,  Rolled  Bar  Iron.  Iron  and  Steel  Rails, 
PER  Ton,  and  of  Cut  Nails,  pek  Keg  op  100  Lbs.* 


Pig  Iron, 

^'0.  1 

Anthracite 

Foundry.  = 


§20.88 
21.38 
22.63 
36.12 
36.88 
27.75 
27.12 
26.38 
22.25 
23' 38 
22.75 
20.25 
23.88 
35.25 
59.25 
46.12 
46.88 
44.12 
39.25 
40.63 
33.25 
35.12 
48.88 
42.75 
30.25 
25.50 
22.25 
18.88 
17.63 
21.50 
28.50 
25.12 
25.75 
22.38 
19.88 
18.00 
18.71 
20.92 
18.88 
17.75 
18.40 
17.52 
15.75 
14.52 
12.66 


Bar  Iron, 

15est 

Rolled.^ 


S59.54 
54.66 
58.79 
83.50 
91.33 
74.58 
73.75 
71.04 
62.29 
60.00 
58.75 
60.83 
70.42 
91.04 
146.46 
106.38 
98.13 
87.08 
85.63 
81.66 
78.96 
78.54 
97.63 
86.43 
67.95 
60.85 
52.08 
45. 55 
44.24 
51.85 
60.38 
58.05 
61.41 
50.30 
44.05 
40.32 
43.12 
49.37 
44.99 
43.40 
45.92 
42.56 
41.89 
38.08 
29.96 


Iron  Rails, 
Standard 
Sections.^ 


S47.88 
45.63 
48.38 
77.25 
80.13 
62.88 
64.38 
64.25 
50.00 
49.38 
48.00 
42.38 
41.75 
76.88 

126.00 
98.63 
86.75 
83.13 
78.88 
77.25 
72.25 
70.38 
85.13 
76.67 
58.75 
47.75 
41.25 
35.25 
33.75 
41.25 
49.25 
47.13 
45.50 

C  cc 

2  g 
<B  _, 

+J   0) 
.    +J 

•^  <4_| 
r-.     O 

di   0) 
en  -1^ 

xn 


Steel 

Kai 

lS.3 

.j^ 

r-^ 

•T> 

yi 

crt 

;:! 

cr'O 

03 

m 

(i> 

u 

ni 

*J 

p 

rAJ 

a 

r— 

n 

CU 

0 

r^ 

fl 

^ 

0) 

© 

r" 

J 

a 

a 

+3 

iC 

a> 

h 

+3 

$166.00 

158.50 

132.25 

106.75 

102.50 

112.00 

120.50 

94.25 

68.75 

59.25 

45.50 

42.25 

48.25 

67.50 

61.13 

48.50 

37.75 

30.75 

28.50 

34.50 

37.08 

29.83 

29.25 

31.75 

29.92 

30.00 

28.12 

24.00 


Cut 
Nails. 


S3. 71 
3.28 
3.13 
4.85 
4.76 
4.10 
3.92 
3.72 
3.53 
3.80 
3.13 
2.75 
3.47 
5.13 
7.85 
7.08 
6.97 
5.92 
5.17 
4.87 
4.40 
4.52 
5.46 
4.90 
3.99 
3.42 
2.98 
2.57 
2.31 
2.69 
3.68 
3.09 
3.47 
3.06 
2.39 
2.33 
2.27 
2.30 
2.03 
2.00 
2.00 
1.86 
1.83 
n.44 
n.08 


Wire 
jS'ails. 


53.15 
2.55 
2.49 
2.51 
2.05 
1.70 
1.49 
1.11 


'Furnished  by  the  American  Iron  and  Steel  Association,  StatMical  Abstract,  1894, 
p.  412.  ^i\l  Phlladflphla. 

3 At  mills  in  Pennsylvania.  'W'liolesale  store  prices  at  Phlladelpliia. 

«Prlc<;s  bused  on  a  ni-w  classification  adopted  in  lH'j;t,  tUo  base  price  and  schedule  o| 
extras  beiiiK  changed  to  correa]JOiid  wltii  tlie  wire  nail  schedule. 


282 


APPENDIX 


GOLD  AND  SILVER. 
World's  Product  of  Gold  and  Silver.' 


Calendar  Year. 

Gold. 

Silver 
(Coining  Value). 

Per  Cent 
Gold. 

Per  Cent 

Silver. 

1492Mo20 

$107,931,000 
114,205,000 
90,492,000 
90,917,000 
98,095,000 
113,248,000 
110,824,000 
116,571,000 
123,084,000 
148,088,000 
170,408,000 
253,611,000 
327,116,000 
275,211,000 
236,464,000 
118,152,000 
76,063,000 
94,479,000 
134,841,000 
363,928,000 
662,566,000 
670,415,000 
614,944,000 
648,071,000 
577,883,000 
572,931,000 
495,582,000 
106,163,900 
105,774,900 
110,196,900 
123,489,200 
118,848,700 
130,650,000 
146,651,500 
157,494,800 
180,567,800 
200,406,000 

§  54,703,000 
98,986,000 
207,240,000 
248,990,000 
348,254,000 
351,579,000 
327,221,000 
304,525,000 
280,166,000 
284,240,000 
295,629,000 
358,480,000 
443,232,000 
542,658,000 
730,810,000 
371,677,000 
224,780,000 
191,444,000 
247,930,000 
324,400,000 
184,169,000 
188,092,000 
228,861,000 
278,313,000 
409,822,000 
509,256,000 
594,773,000 
120,626,800 
124,281,000 
140,706,400 
155,427,700 
163,032,000 
177,352,300 
198,014,400 
213,944,400 
212,829,600 
217,610,800 

66.4 
55.9 
30.4 
26.7 
22.0 
24.4 
25.2 
27.7 
30.5 
33.5 
36.6 
41.4 
42.5 
33.7 
24.4 
24.1 
25.3 
33.0 
35.2 
52.9 
78.3 
78.1 
72.9 
70.0 
58.5 
58.0 
45.5 
46.8 
45.9 
43.9 
44.3 
42.1 
42.4 
42.5 
42.4 
46.3 
47.7 

83  6 

1521-1544 

44  1 

1545-1560 

69  6 

1561-1580 

78  3 

1581-1600 

78  0 

1601-1620 

75  6 

1621-1640 

74  8 

1641-1660 

72  3 

1661-1680 

69  5 

1681-1700 

66  5 

1701-1720 

63  4 

1721-1740 

58  6 

1741-1760 

57  5 

1761-1780 

66  3 

1781-1800 

75  6 

1801-1810 

75  9 

1811-1820 

74  7 

1821-1830 

67  0 

1831-1840 

64  8 

1841-1850 

47  1 

1851-1855 

21  7 

1856-1860 

21  9 

1861-1865 

27  1 

1866-1870 

30  0 

1871-1875 

41  5 

1876-1880 

47  0 

1881-1885 

54  5 

1886 

53  3 

1887 

54  1 

1888 

56.1 

1889 

55.7 

1890 

57  9 

1891 

57.6 

1892 

5.7.5 

1893 

57.6 

1894 

58.7 

1895 

52.3 

Total 

8,781,858,700 

10,344,561,400 

[At.]  45.9 

[At.]  54.1 

^Report  of  the  Director  of  the  Mint,  for  1896,  pp.  232,  238. 

^The  estimates  from  1492  to  1885  are  from  a  table  of  averages  for 
certain  periods  compiled  by  Dr.  Adolph  Soetbeer.  For  the  years 
1886  to  1895,  the  production  is  the  annual  estimate  of  the  bureau  of 
the  mint. 


APPENDIX 


283 


From  the  Report  of  the  Director  of  the  Mint  for  1898,  pp.  272, 
273,  these  additional  figures  are  taken : 


Calendar  Year. 

Gold. 

Silver. 

Per  Cent 
Gold. 

Per  Cent 
Silver. 

1896 

202,682,300 
237,504,800 

217,442,900 
236,730,300 

48.2 
50 

51.8 

1897 

50 

Freight  Rates  on  Grain  and  Flour  prom  St.  Louis,  to  Vari- 
ous Points  During  Each  Year,  from  1877  to  1898. ^ 


To  New  Orleans  by 
River. 

To  New  York  by 
Kail. 

To  Liverpool. 

Calendar 
Year. 

100  lbs. 

Grain  in 

Sacks. 

Wheat  in 

Bulk  by 

Barge, 

per  Bushel. 

Wheat 

per 
100  lbs. 

Flour 
per  Barrel. 

Via  New 

Orleans, 

wheat, 

per  Bushel. 

Via  New 

York, 

Wheat, 

per  Bushel. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

1877 

21 

17.5 

18 

19 

20 

20 

8.5 

7.25 

7.75 

8.25 

6 

6.42 

41 

38 

33.5 

42 

32 

29.5 

83 
76 
67 
84 
64 
59 

1878 

1879 

1880 

1881 

1883 

33.66 

23.60 

1883 

17.75 

5.5 

33 

66 

19.58 

27 

1884 

14. 

6.63 

26 

52 

14.58 

21.25 

1885 

15 

6.4 

23.14 

44.39 

15.11 

30.5 

1886 

16 

6.5 

29 

58 

16.17 

24 

1887 

18 

6.5 

33.13 

64.35 

14.8 

24.8 

1888 

15 

6.5 

39.5 

59 

15.17 

33.95 

1889 

17.93 

5.95 

38.5 

58 

17.33 

34.97 

1890 

15.60 

6.  .58 

27.63 

53.63 

14.33 

31.48 

1891 

16.28 

6.88 

29 

58 

15.75 

33.55 

1893 

16.87 

6.50 

26.62 

58 

14 

31 

1893 

17.54 

6.55 

28.5 

57 

14.71 

31.73 

1894 

17.14 

5.89 

24.73 

50 

11.69 

18.71 

1895 

13 

5.95 

=23.57 

47 

12.13 

18.33 

1890 

14.54 

5 

23 

46 

13.50 

19.671 

1897 

10.83 

4.88 

23.64 

47.26 

12.89 

20.33 

1898 

10 

4.50 

22.25 

45.10 

14.19 

30.33 

'Prepared  Vjy  Mr.  George  11.  Morgan,  Secretary  Merchant.s'  Ex- 
change, St.  Louis,  Missouri,  and  quoted  in  1898  Statistical  Abstract, 
p.  360. 

"Published  rates  since  1894. 


284 


APPENDIX 


UNITED  STATES  ANTHRACITE  COAL  STATISTICS.  ^ 

The  Quantity  of  Anthracite  Coal  Sent  to  Market  from  the 
Beginning^  (of  Mining)  to  the  End  of  1898. 


Year, 

1820 

1821 

1822 

1828 

1824 

1825 

1826 

1827 

1828 

1829 

1830 

1831 

1832 

1833 

1834 

1835 

1836 

1837 

1838 

1839 

1840 

1841 

1842 

1843 

1844 

1845 

1846 

1847 

1848 

1849 

1850 

1851 

1852 

1853 

1854 

1855 

1856 

1857 

1858 

1859 


Tons. 


365 

1,073 

2,240 

5,823 

9,541 

34,893 

48,047 

63,434 

77,516 

112,083 

174,734 

178,820 

363,871 

487,748 

376,636 

560,758 

682,428 

881,476 

739,293 

819,327 

865,414 

958,899 

1,108,001 

1,263,539 

1,631,669 

2,023,052 

2,343,992 

2,982,303 

3,089,238 

3,242,541 

3,254,321 

4,377,130 

4,925,695 

5,114,491 

5,753,369 

6,552,301 

6,751,542 

6,420,342 

6,491,187 

7,517,516 


Year. 


1860 
1861 
1862 
1863 
1864 
1865 
1866 
1867 
1868 
1869 
1870 
1871 
1872 
1873 
1874 
1875 
1876 
1877 
1878 
1879 
1880 
1881 
1882 
1883 
1884 
1885 
1886 
1887 
1888 
1889 
1890 
1891 
1892 
1893 
1894 
1895 
1896 
n897 
4898 


Tons. 


131 

,474 
481 
704 
932 
488 
418 
637 
214 
908 
552 
610 
747, 
689 
805, 
643 
906 
824, 
306 
142 
437 
485 
305 
793 
718, 
637 
136 
341 
145 
510 
855 
448 
893 
089 
391 
292 
270 
637 
899 


^The  Manual  of  Statistics  for  1897,  p.  397. 

^Shipments  commenced  from  the  Lehigh  region  in  1820;  the 
Schuylkill  region  in  1825;  the  Lackawanna  region  in  1829;  the 
Pitt-ston  or  Upper  Lackawanna  region  in  1850,  and  the  Scranton 
region  in  1850. 

^Manual  of  Statistics  for  1899,  p.  449. 


APPENDIX 


285 


Highest  and  Lowest  Prices  (New  York)  of  Crude  Oil,  per 
Barrel,  in  Each  Year.' 


High  Month. 


Hish 
Price. 


January .... 

October 

December  . 

July 

Janizary .... 
January .... 
September.. 

July 

January .... 
January .... 

June 

June 

January  . . . . 

Ajiril 

April 

December . 
January  . . . . 
February... 
December . 

June 

September. 
November. . 

June 

January  . . . . 

October 

January  .... 
December . 

March 

November.. 
February... 
February... 
January  — 
December . 
December . 

April 

January.... 


$1.75 
2.00 
4.00 
14.00 
10.00 
5.00 
4.00 
5.50 
7.00 
4.90 
5.15 
4.10 
3.05 
1.90 
1.65 
4  28 1 
5.70 
1.8Gi 
1.'284 
1.24i 

i.ou 

1.36 
1.24 
1.151 
1.12i 
.92i 
.901 
1.00 
1  12* 

J..  1^2 

1.08 
.81 
Mk 
.79  J 
.955 
2.50 
l.SOJ 


Low  Month. 


November, 
January..., 
January . . . , 
February.., 

August , 

December 

June .  

January..., 
December 
August .... 
January... 
September 
December 
December 
January  . 
January... 

June 

September 

June 

April 

July 

July 

January... 

June 

January... 
August.... 

Jvily 

June 

April  

December 
August  ... 
October ... 
January... 
January.. 
January... 
December 


Low 
Price. 


80.05 
.10 
2.00 
3.75 
4.00 
1.65 
1.50 
1.80 
4.25 
2.75 
8.40 
3.00 
1.00 
.45 
.90 
1.483 
1.53a 
.781 
.631 
.701 
.721 
.491 
.831 

513 

.68 

.59a 

.54* 

.713 

.80 

•  OOJ 

.5li 

.50 

.53 

.79 

.95 

.90 


Average. 


§0.52 
1.00 
3.11 
7.85 
6.65 
8.76 
2.40 
3.57 
5.64 
3.86 
4.42 
3.68 
1.84 
1.17 
1.33 
2.61 
2.37 
1.17 

.86 

.95 

.85 

.79 
1.06 

.84 

.88  J 

.713 

■"■-'3 
.871 
.94» 
.84i 
.66i 
.57^ 
.661 
.871 
1.36 
1.20i 


^Manual  of  Statistics  for  1897,  p.  412. 


286 


APPENDIX 


Commercial  Ratio  of  Silver  to  Gold  Each  Year  Since  1687. ^ 


Year. 

Katio. 

Year. 
1730.. 

liatio. 
14.81 

Year. 

Katio. 

Y'ear. 

Katio. 

:Year. 

Katio. 

1687^ .. 

14.94 

1773.. 

14.62 

1815.. 

15.26 

1857.. 

15.27 

1688... 

14.94 

1731.. 

14.94 

1774.. 

14.62 

1816.. 

15.28 

1858.. 

15.38 

1689... 

15.02 

1732.. 

15.09 

1775.. 

14.72 

1817.. 

15.11 

1589.. 

15.19 

1690... 

15.02 

1733.. 

15.18 

1776.. 

14.55 

1818.. 

15.35 

I860.. 

15.29 

1691... 

14.98 

1734.. 

15.39 

1777.. 

14.54 

1819.. 

15.33 

1861.. 

15.50 

1692... 

14.92 

1735.. 

15.41 

1778.. 

14.68 

1820.. 

15.62 

1862.. 

15.35 

1693... 

14.83 

1736.. 

15.18 

1779.. 

14.80 

1821.. 

15.95 

1803.. 

15.37 

1694... 

14.87 

1737.. 

15.02 

1780.. 

14.72 

1822.. 

15.80 

1864.. 

15.37 

1695... 

15.02 

1738.. 

14.91 

1781.. 

14.78 

1823.. 

15.84 

1865. 

15.44 

1096... 

15.00 

1739.. 

14.91 

1782.. 

14.42 

1824.. 

15.82 

1866.. 

15.43 

1697... 

15.20 

1740.. 

14.94 

1783.. 

14.48 

1825.. 

15.70 

1867.. 

15.57 

1698... 

15.07 

1741.. 

14.93 

1784.. 

14.70 

1826.. 

15.76 

1868.. 

15.59 

1699... 

14.94 

1748.. 

14.85 

1785.. 

14.92 

1827.. 

15.74 

1869.. 

15.60 

1700... 

14.81 

1743.. 

14.85 

1786.. 

14.96 

1828.. 

15.78 

1870.. 

15.57 

1701... 

15.07 

1744.. 

14.87 

1787.. 

14.92 

1829.. 

15.78 

1871. 

15.57 

1702... 

15.52 

1745.. 

14.98 

1788.. 

14.65 

1830.. 

15.82 

1872.. 

15.63 

1703... 

15.17 

1746.. 

15.13 

1789.. 

14.75 

1831.. 

15.72 

1873.. 

15.92 

1704... 

15.22 

1747.. 

15.26 

1790.. 

15.04 

1832.. 

15.73 

1874.. 

16.17 

1705... 

15.11 

1748.. 

15.11 

1791.. 

15.05 

1833.. 

15.93 

1875.. 

16.59 

1706... 

15.27 

1749.. 

14.80 

1792.. 

15.17 

1834.. 

15.73 

1876.. 

17.88 

1707... 

15.44 

1750.. 

14.55 

1793.. 

15.00 

1835.. 

15.80 

1877.. 

17.22 

1708... 

15.41 

1751.. 

14.39 

1794.. 

15.37 

1836.. 

15.72 

1878. 

17.94 

1709... 

15.31 

1752.. 

14.54 

1795.. 

15.55 

1837.. 

15.83 

1879. 

18.40 

1710... 

15.22 

1753.. 

14.54 

1796.. 

15.65 

1838.. 

15.85 

1880.. 

18.05 

1711... 

15.29 

1754.. 

14.48 

1797.. 

15.41 

1839.. 

15.62 

1881. 

18.16 

1712... 

15.31 

1755.. 

14.68 

1798.. 

15.59 

1840.. 

15.62 

1882. 

18.19 

1713... 

15.24 

1756.. 

14.94 

1799.. 

15.74 

1841.. 

15.70 

1883.. 

18.64 

1714... 

15.13 

1757.. 

14.87 

1800.. 

15.68 

1842.. 

15.87 

1884. 

18.57 

1715... 

15.11 

1758.. 

14.85 

1801.. 

15.46 

1843.. 

15.93 

1885.. 

19.41 

1716... 

15.09 

1759.. 

14.15 

1802.. 

15.26 

1844.. 

15.85 

1886.. 

20.78 

1717... 

15.13 

1760.. 

14.14 

1803.. 

15.41 

1845.. 

15.92 

1887.. 

21.13 

1718... 

15.11 

1761.. 

14.54 

1804.. 

15.41 

1846.. 

15.90 

1888.. 

21.99 

1719... 

15.09 

1762.. 

15.27 

1805.. 

15.79 

1847.. 

15.80 

1889.. 

22.10 

1720... 

15.04 

1763.. 

14.99 

1806.. 

15.52 

1848.. 

15.85 

1890. 

19.76 

1721... 

15.05 

1764.. 

14.70 

1807.. 

15.43 

1849.. 

15.78 

1891. 

20.92 

1722... 

15.17 

1765.. 

14.83 

1808.. 

16.08 

1850.. 

15.70 

1892. 

23.72 

1723... 

15.20 

1766.. 

14.80 

1809.. 

15.96 

1851.. 

15.46 

1893. 

26.49 

1724... 

15.11 

1767.. 

14.85 

1810.. 

15.77 

1852.. 

15.59 

1894. 

32.56 

1725... 

15.11 

1768.. 

14.80 

1811.. 

15.53 

1853.. 

15.33 

1895. 

31.60 

1726... 

15.15 

1769.. 

14.72 

1812.. 

16.11 

1854.. 

15.33 

1896. 

30.66 

1727... 

15.24 

1770.. 

14.62 

1813.. 

16.25 

1855.. 

15.38 

1897. 

34.28 

1728... 

15.11 

1771.. 

14.66 

1814.. 

15.04 

1856.. 

15.38 

=1898. 

35.40 

1729... 

14.92 

1772.. 

14.52 

'Report  of  the  Director  of  the  Mint,  for  1896,  p.  221. 

-From  1687  to  1832,  the  rp.tios  are  taken  from  Dr.  A.  Soetbeer ; 
from  1833  to  1878,  from  Pixley  and  Abell's  tables;  and  from  1879 
to  1894,  from  daily  cablegrams  from  London  to  the  bureau  of  the 
mint. 

^Report  for  1898,  p.  252.     Only  nine  months  of  1898  are  included. 


APPENDIX 


287 


FOREIGN  TRADE  OF  THE  UNITED   STATES. 

Value  of  Exports  and  Imports  of    Merchandise  for  Each 

Year,  from  October  1,  1789,  to  June  30,  1898.' 


Year 
Ending 
Sept.  ao. 

ExpTts 
In  Mil- 
lions of 
DoU'rs. 

ImpTts 
in  Mil- 
lions of 
DollTs. 

3 

Y'ear 
Ending 
Sept.  30. 

Exp'rts 
in  Mil- 
lions of 
DoUTs. 

InipTts 
in  Mil- 
lions of 
DollTs. 

Year 
Ending 
Jiuie  30. 

ExpTts 
in  Mil- 
lions of 
DollTs. 

ImpTts 
in  Mil- 
lions of 
DollTs. 

1790 

20 

23 

1827 

74 

71 

1862 

191 

189 

17:)1 

19 

29 

1828 

64 

81 

1863 

204 

243 

179-3..  .. 

20 

31 

1829 

67 

67 

1864 

159 

316 

179:5 

26 

31 

1830 

71 

63 

1865 

166 

339 

1791 

33 

34 

1831 

72 

95 

1866 

349 

435 

179o 

47 

69 

1832 

81 

95 

1867 

295 

396 

1796 

58 

81 

1833 

87 

101 

1868 

282 

357 

1797 

51 

75 

1834  .... 

102 

108 

1869 

286 

418 

1798.... 

61 

68 

n835 

115 

137 

1870 

393 

436 

1799 

78 

79 

1836 

124 

177 

1871 

443 

520 

1800 

70 

91 

1837 

111 

130 

1872 

444 

627 

1801 

93 

111 

1838 

105 

96 

1873 

522 

642 

1802 

71 

76 

1839 

112 

156 

1874 

586 

567 

1803 

55 

64 

1840 

124 

98 

1875 

513 

533 

1804 

77 

85 

1841 

112 

123 

1876 

540 

461 

1805 

95 

120 

1843 

100 

96 

1877 

602 

451 

1806 

1807 

101 
108 

129 
138 

Y'ear  end 'f.^ 
June  30, 

1878 

1879 

095 
710 

437 
446 

1808 

22 

56 

n8-13 

83 

42 

1880 

836 

668 

1809 

52 

59 

1844 

106 

103 

1881 

902 

643 

1810 

66 

85 

1845.... 

106 

113 

1882 

751 

725 

1811 

61 

53 

1846 

110 

118 

1883 

824 

723 

1812 

38 

77 

1847 

157 

122 

1884 

741 

668 

1813 

27 

22 

1848 

138 

149 

1885 

742 

578 

1814 

6 

12 

1849 

140 

141 

1886 

680 

635 

1815 

52 

113 

1850 

144 

174 

1887 

718 

692 

1816 

81 

147 

1851 

189 

211 

1888 

696 

724 

1817 

87 

99 

1852.... 

167 

207 

1889 

742 

745 

1818 

93 

121 

1853 

203 

264 

1890 

858 

789 

1819 

70 

87 

1854 

237 

298 

1891 

884 

845 

1820 

69 

74 

1855 

219 

258 

1892 

1030 

827 

1821.... 

54 

54 

1856 

281 

310 

1893 

848 

866 

1822 

61 

79 

1857 

294 

348 

1894 

892 

655 

1823 

68 

72 

1858 

272 

263 

1895 

808 

733 

1824 

68 

72 

1859 

293 

331 

1896 

883 

780 

1825 

90 

90 

I860..  .. 

334 

354 

1897 

1051 

765 

1826 

73 

78 

1861 

220 

289 

1898 

1231 

616 

'Bureau  of  Statistics — Special  sheets,  1898. 

''Exports  given  are  totals  of  merchandise  wholly  produced  in  the 
United  States,  plus  merchandise  imported  for  export. 

"Imports  include  all  merchandise  imported,  whether  for  con- 
sumption or  export. 

U^revious  to  1835  th*^  millions  are  obtained  by  discarding  the 
remaining  figures ;  after  1835  the  nearest  complete  millions  are  given. 

*Nine  months  only. 


AUTHORITIES   CITED 


Books 


Ashley.      An    Introduction    to   English    Economic    History  and 
Theory.     Putnam's. 

Beach.     Monopolies  and  Industrial  Trusts.     Central  Law  Journal 
Co. 

Bruce.     Economic  History  of  Virginia  in  the  Seventeenth  Century. 
Macmillan. 

Bullock.      Introduction    to    the    Study   of    Economics.      Silver, 
Burdett. 

Clark.     The  Philosophy  of  Wealth.     Ginn. 

CooLEY.     The  United  States  of  America.     Edited  by  N.  S.  Shaler. 
Appleton. 

Cunningham  and  Mc Arthur.     Outlines  of  English  Industrial  His- 
tory.    Macmillan. 

Davenport.     Outlines  of  Elementary  Economics.     Macmillan. 

Davenport.     Outlines  of  Economic  Theory.     Macmillan. 

Ely.     Outlines  of  Economics.     Eaton  &  Main. 

Ely.     The  Labor  Movement  in  America.     Crowell. 

Fabian  Essays.     Charles  E.  Brown. 

FowLE.     The  Poor  Law.     Macmillan. 

Garnier.     History  of  the  English  Landed  Interest.     Sonnenschein. 

Garvey.     The  Silent  Revolution.     Wm.  &  Frederic  Cash. 

GiBBlNS.     Industry  in  England.     Scribner's. 

GiDE.     Principles  of  Political  Economy.     Heath. 

GOMME.     The  Village  Community.     Scribner  &  Welford. 

GoNNER.     The  Socialist  State.     W.  Scott. 

Green,  A.  S.     Town  Life  in  the  Fifteenth  Century.     Macmillan. 

Green,  J.  R.     Short  History  of  the  English  People.     Harper. 

Gross.     The  Gild  Merchant.     Clarendon  Press. 

Hart.     American  History  Told  by  Contemporaries.     Longmans. 

Harris.     Moral  Evolution.     Houghton. 

Hinsdale.     The  American  Government.     Werner  School  Book  Co. 

HOBSON.     Problems  of  Poverty.     Methuen  &  Co. 

Hobson.     The  Evolution  of  Modern  Capitalism.     Scribner's. 

289 


AUTHORITIES  CITED  289 

Hull  House  Maps  and  Papers.     Crowell. 

JonxsTOX.     History  of  American  Politics.     Holt. 

KiRKUP.     An  Inquiry  into  Socialism.     Longmans. 

Lalor.     Cyclopedia  of  Political  Science  and  Political  Economy. 

Maynard,  Merrill. 
Laughlin.    The  Elements  of  Political  Economy.     American  Book 

Co. 
Marshall.     Elements  of  Economics  of  Industry.     Macmillan. 
Marshall.     Principles  of  Economics.     Macmillan. 
Marx.     Capital.     Humboldt. 

Medley.     A  Student's  Manual  of  Constitutional  History.      Sim- 
kins. 
MuLHALL.     Industries  and  Wealth  of  Nations.     Longmans. 
Paxtaleoxi.     Pure  Economics.     Macmillan. 
Partox.     Captains  of  Industry.     Houghton. 
Pollock.    The  Land  Laws.    Macmillan. 
Rae.     Eight  Hours  for  Work.     Macmillan. 
Rogers.     Six  Centuries  of  Work  and  Wages.     Putnam's. 
Roosevelt.     The  Winning  of  the  West.     Putnam's. 
Schaffle.     The  Quintessence  of  Socialism.     Humboldt. 
SCHLOSS.     Methods  of  Industrial  Remuneration.     Williams  &  Nor- 

gate. 
Schmoller.    The  Mercantile  System.    Macmillan. 
Seebohm.     The  English  Village  Community.     Longmans. 
Shirres.     An  Analysis  of  the  Ideas  of  Economics.     Longmans. 
Small   and    Vixcext.     Introduction  to    the    Study    of    Society. 

American  Book  Co. 
Smart.     An  Introduction  to  the  Theory  of  Value.     Macmillan. 
Smart.     Studies  in  Economics.     Macmillan. 
Smiles.     Industrial    Biography:     Ironworkers    and    Tool-Makers. 

Harper. 
Smiles.     Men  of  Invention  and  Industry.     Harper. 
Spahr.     An  Essay  on  the  Present  Distribution  of  Wealth  in  the 

United  States.     Crowell. 
Stimsox.     Handbook  to  the  Labor  Law    of    the    United    States. 

Scribner's. 
Stubbs.     Select  Charters.     Clarendon  Press. 
Taussig.     Wages  and  Capital.     Appleton. 
Taylor.     Introduction    to    a    History  of    the    Factory    System. 

Bentley. 
Taylor.     The  Modern  Factory  System.     Kegan  Paul. 
TOYXBEE.     Lectures  on    the   Industrial    Revolution    in    England. 

Rivington's. 


290  AUTHORITIES  CITED 

ViNOGRADOFF.     Villeinage  in  England.     Clarendon  Press. 

Walker.     Political  Economy.     Holt. 

Warner.     American  Charities.     Crowell. 

Webb  and  Webb.     The  History  of  Trade  Unionism.     Longmans. 

Webb  and  Webb.     Industrial  Democracy.     Longmans. 

Weeden.  Economic  and  Social  History  of  New  England.  Hough- 
ton. 

Wright.  Industrial  Evolution  of  the  United  States.  Flood  & 
Vincent. 


Periodicals,  Kepoets,  Manuals,  Monographs 

Adams.    The  Department   Store.    Scribner's   Magazine,  January, 

1897. 
Addams.     a  Belated  Industry.     American  Journal  of  Sociology, 

March,  1896. 
Brooks.     Bibliography  of  the  Sweating  System.    Municipal  Affairs, 

Vol.  I. 
Clow.     Economics    as    a    School    Study.      American     Economic 

Ass'n,  Vol.  IV,  No.  3. 
Clow.     The  Study  of  Municipal  Finances.      Quarterly  Journal  of 

Economics,  Vol.  X. 
CooLEY.     Theory  of  Transportation,  Vol.  IX,  No.  3.     Publications 

of  American  Economic  Ass'n. 
Davis.     Does  Machinery  Displace  Labor?    Forum,  July,  1898. 
Donaldson.     The    Public  Domain:    Its  History,  with  Statistics. 

U.  S.  Gov't  Publications. 
Forrest.     Anti-Monopoly   Legislation    in    the    U.   S.      American 

Journal  of  Sociology,  January,  1896. 
Harris,  W.  T.     Is  there  Work  Enough  for  All?    Forum,  Vol.  XXV. 
HowERTH.     A  Programme  for  Social  Study.     American  Journal  of 

Sociology,  May,  July,  and  September,  1897. 
HowERTH.     I'iolit-sharing  at    Ivorydale.      American    Journal    of 

Sociology,  July,  1896. 
Hubert.    The  Business  of  a  Factory.    Scribner's  Magazine,  March, 

1897. 
Kelley.     Aims  and  Principles  of  the  Consumers'  League.    Ameri- 
can Journal  of  Sociology,  November,  1899. 
Kelley.     The  United  Stales  Supreme  Court  and  the  Utah  Eight 

Hour  Law.     American  Journal  of  Sociology,  July,  1898. 
Kelley.    The  Working  Boy.     American  Journal  of   Sociology, 

November,  1896. 


AUTHORITIES  CITED  291 

Lanier.     The  Working  of  a  Bank.     Scribner's  Magazine,  May,  1897. 
MacLean.     Factory  Legislation  for  Women  in  the  United  States. 

American  Journal  of  Sociology,  September,  1897. 
Manual  of  Statistics  and  Stock  Exchange  Handbook.     Charles  H. 

Nicoll. 
McMaster.     Century  of    Social  Betterment.     Atlantic  Monthly, 

Vol.  LXXIX. 
Monroe.     Possibilities  of  the  Present  Industrial  System.     Ameri- 
can Journal  of  Sociology,  May,  1898. 
Monroe.     Profit-Sharing  in  the  United  States.     American  Journal 

of  Sociology,  May,  1896. 
Old  South  Leaflets.     Directors  of  the  Old  South  Work. 
Poor.     Manual  of  Railroads.     H.  V.  &  H.  W.  Poor. 
Potter.     Man  and  the  Machine.      North  American  Review,  Vol. 

LXV. 
Report  of  Department  of  Labor.     U.  S.  Gov't. 
Report  of  the  Director  of  the  Mint.     U.  S.  Gov't. 
Report  of  Illinois  Bureau  of  Labor  Statistics,  1894. 
Sato.     History  of  the  Land  Question  in  the  United  States.     Johns 

Hopkins  University  Studies,  1886. 
Seligman.     Classification  of  Public  Revenues.     Quarterly  Journal 

of  Economics,  April,  1893. 
Statesman's  Year  Book.     Macmillan. 
Statistical  Abstract.     U.  S.  Gov't. 
Steffens.     The  Business  of  a  Newspaper.     Scribner's  Magazine, 

October,  1897. 
Turner.     The  Significance  of  the  Frontier  in  American  History. 

Fifth  Year  Book  National  Herbart  Society. 
Vincent.     A  Belated  Frontier.     American  Journal  of  Sociology, 

July,  1898. 
White.     The  Business  of  a  Wlieat  Farm.      Scribner's  Magazine, 

November,  1897. 
Williams.     A  Great  Hotel.     Scribner's  Magazine,  February,  1897. 
Wright.     Contributions  of   the  United  States  to  Social  Science. 

American  Journal  of  Sociology,  November,  1895. 
Wright.     Do  Labor-Saving  Macliines  Deprive  Men  of  Labor?    The 

Chautauquan,  Vol.  XXV. 
Wright.     The  Factory  System.     Tenth  Census  of  United  States, 

Vol  II. 


INDEX 


Addams,  reference  to,  162. 

Agriculture,  on  manor,  51-57;  in 
the  colonies,  117;  development 
of  in  the  U.  S.,  157,  158;  mod- 
ern, 154-158;  modern  enclosure 
of  common  fields,  154,  155;  pe- 
riods of  development  in  Eng- 
land, 156.  See  Extractive 
Industries. 

America,  colonization  and  settle- 
ment of,  114. 

American  Federation  of  Labor. 
See  Labor  Organizations. 

American  Journal  of  Sociology, 
reference  to,  86,  189,  190,  220, 
274. 

American  Eailway  Union.  See 
Labor  Organizations. 

Apprentices  in  Home  Period,  63, 
64. 

Apprenticeship  in  Domestic  Pe- 
riod, 105. 

Armada,  Spanish,  96. 

Ashley,  reference  to,  47,  49,  69, 
70,  71,  72,  73,  74,  75,  91,  100,  103, 
106,  109,  110;  on  uncertainty  of 
English  foreign  market  in  Do- 
mestic Period,  100;  on  periods 
of  agricultural  development  in 
England,  156. 

Aulnager,  work  of,  78,  79. 

Bailiff,  56. 

Balk,  use  of  on  manor,  49. 

Bank  of  England,  establishment 
of,  102;  charter  of,  102;  loan 
funds  in,  110. 

Barter,  59;  in  England  during 
Domestic  Period,  101 ;  frequency 
of  in  colonies,  125,  126. 

Bills  of  Exchange  in  colonies, 
126. 

Black  Death,  significance  of ,  68-71. 

Boon  days,  53. 


Bordar,  52. 

Bridgewater,  Duke  of,  and  Eng 
lish  canals,  96. 

Bruce,  on  colonial  manufactures 
in  comparison  with  English 
118,  119;  reference  to,  85,  120 
122,  125,  130. 

Bullock,  on  statistics  of  expendi 
ture,  43;  on  Sequence  of  agri 
cultural  development  in  U.  S. 
157;  reference  to,  191. 

Bureau  of  Labor  Statistics,  Illi 
nois,  on  growth  in  value  of  city 
land,  234. 

Business,  study  of  actual,  21,  22. 

Business,  forms  of,  22. 

Canals,  English,  148;  American, 
148,  149;  English,  and  Duke  of 
Bridgewater,  96. 

Capital,  definition  of,  62,  218;  rela- 
tion of  to  labor,  246;  relation 
of  to  productive  process,  26; 
large  extractive,  transforming, 
transporting,  and  transferring 
industries  compared  with  refer- 
ence to  dependence  on,  172,  173; 
two  objects  for  borrowing  of, 
237,  238. 

Capitalism,  modern,  171-175;  com- 
parison of  with  Home  System, 
171;  with  Gild  System,  171; 
with  Domestic  System,  171,  172. 

Capitalists,  in  Home  Period,  62;  in 
Gild  Period,  80;  English  in  Do- 
mestic Period,  109,  110;  in  colo- 
nies, 129. 

Captain  of  Industry.  See  Under- 
taker. 

Census,  U.  S.,  for  1890,  quoted  for 
statistics  of  occupation,  21;  first 
in  U.  S.,  114;  of  persons  in  Eng- 
lish occupations  in  1760,  155. 
See  Occupations. 


292 


INDEX 


293 


Chandler,  F.  K.,  extract  from 
report  of,  233.  237. 

Oiarles  V,  aud  English  trade, 
99,  100. 

Chicago  Real  Estate  Board,  refer- 
ence to,  233. 

Clark,  George  Rogers,  service  of 
in  Northwest  Territorj-,  114. 

Clark,  J.  B.,  reference  to,  194. 

Clothier,  English,  as  iindertaker 
in  Domestic  Period,  89. 

Clow,  Plan  by,  227;  reference 
to,  192. 

Coach,  first  English,  used  by 
Elizabeth,  96,  97;  clumsiness  of, 
96,  97;  inci'ease  in  use  of,  97. 

Coinage,  debased  by  Henry  VIII 
and  Edward  VI,  101;  for  low 
countries,  101,  102. 

Coins,  value  of  at  various  times  in 
England,  101;  value  of  as 
affected  by  decrease  in  size,  in- 
crease in  silver,  etc  ,  101 ;  value 
of  silver  compared  with  gold, 
102;  value  of,  compared  witli 
bullion,  102. 

Combination  Laws  of  George  III, 
181. 

Commodity,  defined  and  relation 
of  to  a  good  and  to  utilitv, 
28,  29. 

Commutation  of  services,  69. 

Companies,  East  India,  Plymouth, 
London,  Hudson  Bay,  Chartered 
of  South  Africa,  99. 

Conditions  of  labor  and  wages, 
modern,  178,  179. 

Consumers'  Leagues,  274. 

Consumption,  272-277;  personal, 
how  to  gather  and  compare 
statistics  of,  41,  42,  43;  kinds  of, 
272;  social,  274. 

Contract  and  status,  significance 
of  in  determining  economic 
relations,  35,  36;  freedom  of  in 
Home  Period,  64;  freedom  of  in 
Gild  Period,  83;  in  England  in 
Domestic  Period,  112,  113;  in 
colonies,  130  - 132;  limitations 
upon  freedom  of,  204. 

Convertible  husbandry,  71. 

Cooley,  reference  to,  94;  on  rail- 
way freight  rates  in  the  U.  S., 
150. 


Cooperation,  directions  for  study 
of,  22;  reasons  for,  174. 

Corn  Laws,  English,  107. 

Corporation,  directions  for  study 
of,  22;  causes  of,  174. 

Cotter,  52. 

Cotton,  increase  in  manufacture 
of  in  England  after  great  inven- 
tions, 139,  140. 

Craft-gild,  formation  of,  63;  ninn- 
ber  of  in  Gild  Period,  72;  mem- 
bership of,  77:  relation  to  Mer- 
chant Gild,  77;  purposes  of,  78; 
relation  to  town  officials,  77,  78: 
compared  to  trade  union,  83, 
84. 

Cunningham  and  McArthur,  ref- 
erence to,  51,  69,  71,  93,  100,  101, 
102,  106. 

Custom,  force  of  in  Home  Period, 
64. 

Davenport,  on  economic  desir- 
ability, 23,  24;  reference  to,  191. 

Davis,  reference  to,  134. 

Definition,  tests  of  good,  32. 

Demand  and  supply,  use  of  terms, 
209;  relation  to  market  price, 
211;  terms  often  used  with  little 
meaning,  211. 

Demesne  lands,  50. 

Departnient  of  Labor  Report  No. 
8,  reference  to,  177. 

Dependents,  defined  and  cla.ssified, 
31;  in  Home  Period,  60;  in  Gild 
Period,  75,  76;  English  in  Do- 
mestic Period,  104,  105;  in  the 
colonies,  128;  statistics  of  mod- 
ern, 162,  163;  efforts  to  deal  with 
problem  of,  163-166. 

Desirability,  compared  to  utilit3% 
23. 

Diagrams,  use  of  in  stating  eco- 
nomic facts,  19,  20,  21,  38. 

Diminishing  returns,  law  of, 
statement  and  discussion  of,  255. 

Distribution,  225-249;  definition 
of,  221 ;  .shares  of,  225;  the  prob- 
lem of,  225. 

Dividends,  world  income  and 
national  income,  226;  relation 
of  to  amount  of  goods  produced, 
226;  di.scussion  of  world  divi- 
dend, 247;  discussion  of  na- 
tional, 247. 


294 


INDEX 


Domesday  Survej^  52. 

Domestic  Period  of  industry,  47; 
in  England,  85-113;  limits  of  in 
America,  113;  discussion  of,  113- 
133;  united  with  Home  Sj'stem 
in  colonies,  132;  transition  to 
Factory  System  in  U.  S.,  145. 

Donaldson,  on  the  public  domain, 
167 ;  on  American  land  tenure, 
115. 

Economic  terms,  right  use  of,  36 ; 
statements  and  questions,  how 
made  by  students,  39 ;  material, 
sources  of,  191. 

Edward  HI  and  the  Flemish 
weavers,  79. 

Eight-Hour  Day,  discussion  of, 
264. 

Ely,  on  progress  of  labor  move- 
ment, 188;  reference  to,  67,  182, 
191. 

Employer,  relation  of  to  emploj^ed 
previous  to  Factory  Period,  111, 
112.     See  Undertaker. 

Enclosure,  after  Black  Death,  70, 
71.    See  Agriculture. 

Entail,  79. 

Exchange,  conditions  of,  201,  202 ; 
relation  of  money  to,  201 ;  two 
valuations  made  in,  201 ;  advan- 
tage of,  200-202;  motives  for,  202. 

Exports,  early  American,  117,  118. 

Extractive  Industries  on  manor, 
56,  57;  in  Gild  Period,  67^71; 
English,  in  Domestic  Period, 
91;  in  early  America,  116-118. 
See  Agriculture,  Mining, 
Fishing,  Lumbering,  etc. 

Extractors,  as  producers,  31. 

Fabian  Essays,  on  economic  para- 
sitism, 166. 

Factors  of  production,  ownership 
of,  239. 

Factory  Laws,  English,  180; 
American,  180,  181. 

Factory  Period  of  industry,  47; 
general  discussion  of,  134-189; 
transition  to  in  U.  S.,  145. 

Family  Period  of  industry,  47. 

Federation  of  Labor,  American, 
182. 

Feudalism,  description  of,  60,  61. 

Fishing,  in  England,  in  Domestic 
Period,  93;  in  the  colonies,  117, 


118;  recent  in  England  and  the 
U.  S.,  158,  159. 

Flemish  weavers,  importation 
of,  79. 

Forrest,  reference  to,  186. 

Forum,  reference  to,  187. 

Fowle,  on  English  poor-law  ad- 
ministration, 104. 

Franklin,  on  means  of  colonial 
travel,  124,  125. 

Freedom  of  contract.  See  Con- 
tract. 

Freight-rates,  colonial,  on  water 
and  land,  124;  railway,  1860 
compared  with  1894,  158. 

Frontier,  significance  of,  86,  87. 

Fulling  mills,  in  colonies,  121. 

Function,  society,  landlord,  cap- 
italistic, undertaking,  ordinary 
labor,  importance  of  to  any  pro- 
ductive process,  33. 

Garnier,  reference  to,  60,  79,  108. 

Garvey,  on  ploughing  up  roads, 
94;  on  seventeenth  century  op- 
position to  coaches,  97;  on  isola- 
tion of  English  people  in  eight- 
eenth century,  98. 

Gibbins,  on  specialization  of 
manufactures  in  certain  dis- 
tricts, 143,  144;  on  first  Englisli 
railway,  147;  on  fairs  and  trad- 
ing in  England,  159;  on  decay 
of  English  small  farmer,  109;  on 
condition  of  English  wage- 
workers  early  in  nineteenth 
century,  178;  reference  to,  85, 
95,  155. 

Gild  Merchant,  purpose  of,  59. 

Gild  Period  of  industry,  47. 

Gild  Period  of  industry  in  Eng- 
land, 67-84;  characteristics  of, 
73,  74. 

Gild  S3stem,  change  from  to  Do- 
mestic, 88;  no  general  develop- 
ment of  in  America,  122;  break- 
down of,  105. 

Gomme,  reference  to,  on  land 
holding,  57. 

Good,  relation  of  to  utility  and 
commodity,  29. 

Goods,  classified,  31;  consumption 
goods,  218;  difi^erent  orders  of, 
218;  not  mere  quantity  of,  but 
valuable  product  desired,  246. 


INDEX 


295 


Graphics,  use  of  in  stating  indus- 
trial facts,  19,  20.  21,  38. 

Green,  A.  S.,  on  English  medieval 
roads,  94,  95;  on  subordination 
of  English  towns  to  nation,  106; 
reference  to,  07,  71,  76,  10.5. 

Green,  J.  R.,  on  condition  of  Eng- 
lish masses  in  eighteenth  cen- 
tury, 103;  on  English  Empire  in 
the^East,  108. 

Grist  mills  in  colonies,  121. 

Gross,  reference  to,  59,  73,  99. 

Harris,  George,  on  division  of 
labor,  44,  45. 

Harris,  W.  T.,  reference  to,  87, 
134,  162. 

Hart,  reference  to,  114. 

Henrj'  II  and  a  sliding  scale,  79. 

Henry  VI  and  weights  and  meas- 
ures, 78. 

Henry  VII  and  weights  and  meas- 
ures, 78. 

Henry  VIII  and  trade  with  Spain, 
99,  100;  and  the  monasteries, 
108. 

Heriot,  53. 

Hinsdale,  on  rents  of  land  in 
colonial  America,  115. 

Hobson,  on  English  roads  in  eight- 
eenth century,  95;  on  increase 
in  Englisli  cotton  manufacture, 
139,  140;  on  periods  of  develop- 
ment of  English  manufacture, 
142,  143 ;  on  effect  of  new  motive 
power  on  iron  machinery,  141 ; 
on  per  cent  of  persons  dying 
dependent  on  charity,  163;  on 
English  factory  laws,  180,  181; 
reference  to,  85,  92,  171. 

Home  Period  of  industry  in  Eng- 
land, 4G-56;  characteristics  of, 
64;  limits  of,  64,65. 

Home  System  united  with  Do- 
mestic System  in  the  colonies, 
122. 

Homes,  statistics  of  rented  and 
owned  in  the  U.  S.  in  1890,  168. 

Howerth,  reference  to,  189,  190. 

Hull  House  maps  and  papers  on 
family  incomes,  42. 

Ideals,  change  in  English  national 
in  Domestic  Period,  106-108. 

Industry,  periods  of,  47,  67,  85, 
134. 


Interdependence  of  men  and 
nations,  159. 

Interest,  capital's  share  of  prod- 
uct, 225 ;  discussion  of,  287 ;  rate 
of,  238. 

Inventions,  the  great,  work  of 
many  men,  138. 

Iron,  increase  in  English  manu- 
facture of,  141;  production  of 
in  the  U.  S.,  280;  prices  of 
1850-1894,  281.     See  Mixing. 

Iron-mining  in  Gild  Period,  71. 

Jameson,  and  the  Transvaal  raid, 
99. 

Johnston,  on  American  tariff,  184. 

Kelley,  reference  to,  177,  220,  274. 

Knights  of  Labor,  formation  of, 
182.  See  Labor  Organiza- 
tions. 

Labor,  relation  of  to  capital,  246 ; 
conditions  of,  258. 

Labor  class.  See  Wage- Work- 
ers. 

Labor  Organizations,  discussion 
of,  261. 

Labor  question,  rise  of  in  Gild 
Period,  82,  83. 

Laissez  faire,  definition  of,  185; 
reaction  against,  186. 

Land,  feudal  tenure  of  in  England 
changing,  108,  109. 

Landholding  in  colonial  Amer- 
ica, 114,  115;  modern  in  the  U. 
S.,  167,  168;  statistics  of  homes 
owned  and  rented  in  the  U.  S. 
in  1890,  168;  modern  in  Eng- 
land, 168-171. 

Landlords,  in  Home  Period,  61,  62; 
in  Gild  Period,  79,  80;  English, 
in  Domestic  Period,  108,  109;  in 
the  colonies,  128,  129;  modern 
English,  ratio  of  to  tenants,  l(i9, 
170. 

Laughlin,  reference  to,  191. 

Law  of  diminishing  returns, 
statement  and  discussion  of, 
255. 

Laws,  modern,  to  control  indus- 
try, 186,  187.    See  Society. 

Legislation,  English,  res])ecting 
American  colonies,  outline  of, 
115,  116;  effect  of  on  American 
indu.strial  development,  116. 
See  Society. 


296 


INDEX 


Loan  funds,  increase  of  in  Eng- 
land, 110. 

Low  Countries,  value  of  coins  of 
compared  with  English  at  time 
of  William  III,  101,  103. 

Lumbering,  English,  in  Domestic 
Period,  98;  in  the  colonies,  117; 
recent,  in  England  and  the 
United  States,  158,  159. 

Machine,  distinguished  from  a 
tool,  135,  136. 

Machinery  and  tools  in  colonies, 
120,  131;  modern  development 
of,  136,  137;  tools  of,  136,  137; 
transmitting  mechanism  of,  137 ; 
motive  power  of,  137,  138;  in- 
vention of  for  cotton  manufac- 
ture, 138,  139;  introduction  of 
modern  into  the  U.  S. ,  144. 

MacLean,  reference  to,  179. 

McMaster,  reference  to,  116. 

Magna  Charta,  74,  113. 

Man,  relation  of  to  productive 
process,  26 ;  economic  classifica- 
tion of,  31 ;  relation  of  to  pro- 
duction, 221 ;  relation  of  to 
utilities,  225 ;  relation  of  to  con- 
sumption, 272. 

Manager,  the  modern.  See  Under- 
taker. 

Manor,  bird's-eye  view  of,,  49,  50; 
change  of  after  Black  Death,  69, 
71 ;  cultivation  of,  51 ;  lord  of, 
50;  tenants  of,  50;  manor 
house,  50.    See  Home  Period. 

Manual  of  Statistics  and  Stock 
Exchange  Handbook,  tables 
from,  279,  280,  284,  285. 

Manufactures,  value  of  in  U.  S. 
in  1790,  120;  kinds  of  given  over 
to  machine  processes,  141,  143; 
increase  of  in  the  U.  S.  in  last 
century,  146;  leading  trans- 
forming states  in  1890,  146,  147; 
geographical  center  of  in  1890, 
147.  See  Transforming  In- 
dustries. 

Manufacturers.  See  Transform- 
ers. 

Market,  English,  enlargement  of 
in  Domestic  Period,  1()5 ;  lack  of 
in  colonial  America,  116,  117; 
early  American,  160;  size  of 
208. 


Marshall,  on  number  of  English 
small  tenants,  170;  on  law  of 
diminishing  returns,  255;  refer- 
ence to,  191,  218. 

Marx,  on  distinction  between  a 
tool  and  a  machine,  136. 

Medley,  on  vicious  effects  of  old 
English  poor-laws,  164;  refer- 
ence to,  61,  70. 

Mercantilism,  in  England,  106, 107. 

Merchants  of  the  Staple,  73. 

Mining,  during  Home  Period,  56, 
57;  English,  in  1720,  93;  in  the 
colonies,  118;  recent  in  Eng- 
land and  the  U.  S.,  158. 

Monasteries,  effect  of  suppression 
of  by  Henry  Vlll,  108,  109. 

Money,  forms  of  in  colonies, 
125,  126 ;  examples  of  use  of,  196 ; 
nature  of,  304;  changes  in  the 
value  of,  350 ;  some  uses  of,  250 ; 
important  facts  relating  to,  253. 

Money  economy  taking  place  of 
natural  economy  in  England, 
100,  101. 

Monopoly,  its  relation  to  produc- 
tion and  distribution,  260. 

Monroe,  reference  to,  189. 

Mulhall,  reference  to,  151 ;  on  foot- 
tons  of  power  devoted  to  pro- 
duction and  transi^ortation,  153. 

Municipal  affairs,  reference  to,  187. 

Municipal  finances,  plan  for  study 
of,  227. 

Nation.  English,  ascendency  of 
over  towns  in  Domestic  Period, 
105,  106. 

Natural  economy  giving  way  to 
money  economy  in  England, 
100,  101. 

Natural  resources,  relation  of  to 
production,  26;  defined,-  217; 
ownership  of,  232 ;  the  unearned 
increment,  233. 

Navigation  acts,  English,  107. 

Newspapers,  English,  when  start- 
ed, 103. 

Non-Importation  agreement,  quo- 
tation from,  131,  132. 

Occupations,  observation  of,  17; 
classification  of,  18;  diagrams 
of  suggested,  20,  21 ;  compari- 
son of  local  with  national,  20, 
21;   census  statistics  of  in  the 


INDEX 


297 


U.  S.  in  1890,  31 ;  English  statis- 
tics of  in  1688,  92,  in  1709,  155. 

Old  South  Leaflets,  reference  to, 
124,  125. 

Open  fields,  50. 

Ordinance  of  1787  on  primogeni- 
ture in  tlie  U.  S.,  167. 

Ownership  and  property  right, 
defined,  34;  significance  of  to 
modern  industry,  33,  34,  35,  36; 
private  and  public  discussed,  34 ; 
kind  of  proposed  by  anarchy, 
socialism,  communism,  34.  See 
Property. 

Padrone  system,  Italian,  com- 
pared to  tliat  of  indentured  serv- 
ants, 127. 

Pantaleoni,  on  commodity,  28. 

Parasites,  defined,  31;  who  are 
they?  166. 

Parliament,  changes  of  in  relation 
to  the  crown  dvu'ing  Domestic 
Period,  106-108. 

Partnership,  directions  for  study 
of,  22;  causes  of ,  174. 

Parton,  reference  to,  134. 

Peasants'  Revolt,  70. 

Piers  the  Plowman,  quotation 
from,  72. 

Poor.    See  Dependents. 

Poor  Laws  of  Elizabeth,  104. 

Poor's  JIanual  of  Railways  on 
American  railways,  149,  150. 

Population,  decrease  of  agricul- 
tural in  England,  155,  156;  in 
the  U.  S.,  157,  158;  relation  of 
to  natural  resources,  257. 

Postal  sv.stem,  establishment  of  in 
England,  98;  cost  of,  98. 

Precarice,  53. 

Price,  buyer's,  seller's,  market, 
defined  and  illustrated,  40,  41; 
functions  of  market,  40,  41 ; 
defined,  and  buyer's  and  seller's 
prices,  201 ;  social  or  market 
price  determined,  205;  persons 
affected  by  changes  of,  251. 

Primogeniture,  79. 

Printing  press,  Caxton's,  74;  in 
colonies,  121. 

Producer  and  non-producer  de- 
fined,  30,    31. 

Production,  formulae  for  eco- 
nomic, 20;   nature  of,    216;  def- 


inition of,  217;  formulae  of, 
217-219;  control  of  by  society, 
219;  relation  of  man  to,  221; 
fundamentally  desirable  result 
of,  222;  distinction  between 
wealth  and  services,  231. 

Profit-sharing,  directions  for  study 
of,  22. 

Profits,  discussion  of,  229;  man- 
ager's share  of  product,  225. 

Property,  private,  in  Home  Pe- 
riod, 64;  in  Gild  Period,  83;  in 
England  in  Domestic  Period, 
112,  113;  dependent  upon  people, 
112,  113;  in  colonies,  130-132; 
social  versus  private,  what  is 
the  tendency?  187,  188.  See 
Ownership. 

Public  domain,  importance  of  and 
management  of  in  the  U.  S.,  167. 

Public  opinion,  relation  of  to 
production,  26. 

Quarterly  Journal  of  Economics, 
plan  by  Frederick  R.  Clow,  227. 

Rae,  reference  to,  264. 

Railways,  growth  of  English,  1830- 
1895,147;  growth  of  American, 
1830-1895;  149,  150;  first  Eng- 
lish, 147,  148;  first  American, 
149;  consolidation  of  in  the 
U.  S.,  149,  150. 

Reeve,  56. 

Rent,  discussion  of,  232;  share  of 
owners  of  natvu-al  resources,  225. 

Report  of  the  Director  of  the  Mint, 
tables  from,  282,  286. 

Review  of  Reviews,  reference  to, 
187. 

Roads,  colonial,  123-125.  See 
Transportation. 

Rogers,  on  medieval  clergy,  74, 
75 ;  on  eighteenth  century  roads 
compared  with  those  of  thir- 
teenth, 98 ;  on  the  village  trader 
and  peddler,  in  England,  160;  on 
lack  of  difrerfintiation  in  occu- 
pations of  middle  ages,  100,  101. 

Roman  roads,  decay  of,  94. 

Roosevelt,  reference  to,  114. 

Sailing  vessels,  giving  place  to 
steamships,  151.  See  Ships  and 
Transportation. 

Sato,  references  to,  109,  114,  115; 
on     the     Ordinance     of    1787, 


298 


INDEX 


167;  on  the  importance  of  the 
General  Land  Office,  167. 

Schloss,  reference  to  on  forms  of 
bvisiness,  22. 

SchmoUer,  reference  to,  106. 

Schools,  English  in  eighteenth 
century,  103. 

Scribner's  Magazine,  quoted  for 
conduct  of  great  businesses,  27. 

Seebohm,  reference  to  on  manor, 
49;  on  villein's  services,  53-55. 

Seligman,  on  definitions  of  taxes, 
etc.,  268. 

Seneschal,  56. 

Serf,  the  villein  a,  55. 

Servants,  defined  and  classified, 
31;  in  Home  Period,  59;  in  Gild 
Period,  74,  75 ;  in  England  in  Do- 
mestic Period,  103;  in  the  colo- 
nies, 127,  128;  indentured,  127; 
specialization  of  in  Factory 
Period,  160,  161. 

Services,  defined,  31;  ratio  of 
those  who  produce  to  those  who 
produce  wealth,  161. 

Sheep  farming  in  England,  70, 
80,  81. 

Ships,  English  in  Domestic  Period, 
96;  colonial,  number  of,  126, 
127.  See  Vessels  and  Trans- 
portation. 

Shirres.  on  utility,  27,  28. 

Single  Tax,  mention  of,  233. 

Six  Companies,  Chinese,  system 
of  compared  to  that  of  inden- 
tured servants,  127. 

Slaves  in  Home  Period,  52,  62; 
number  of  in  U.  S.  in  1790,  127; 
number  of  compared  with  that 
of  indentured  servants  in  Vir- 
ginia in  1671,  127. 

Small  and  Vincent,  reference  to, 
87. 

Smart,  quotation  from,  275. 

Smiles,  reference  to,  134. 

Social  Democracy.  See  Labor 
Organizations. 

Society,  relation  of  to  productive 
process,  26;  political  functions 
of  in  Home  Period,  60,  61 ;  in 
Gild  Period,  78,  79;  relation  of 
to  Engli.sh  industry  in  Domestic 
Period,  105-108;  control  of  in- 
dustry by  in  colonies,  130  132; 


superiority  of  to  the  individual 
manor  business,  174,  175;  rela- 
tion of  to  production,  219.  See 
Legisl.\tion. 

Socmen,  52. 

Spahr,  on  statistics  of  income,  42 ; 
on  statistics  of  homes,  168;  on 
wage- worker's  loss  of  time,  179, 
180. 

Staple  towns,  73. 

Statesman's  Year-Book,  on  Eng- 
lish railways,  148 ;  on  registered 
tonnage  of  English  vessels,  1840- 
1890,  151;  reference  to,  155;  on 
poor  rates,  163;  on  ratio  of  Eng- 
lish land  owners  to  those  not 
owning  land,  169,  170. 

Statistical  Abstract,  tables  from, 
20,  280,  281,  283. 

Status  and  contract,  significance 
of  in  determining  economic  re- 
lations, 35,  36. 

Statutes  of  laborers,  cause  of,  69 ; 
idea  of,  75,  76. 

Steamships,  substitution  of  for 
sailing  vessels,  151. 

Steward,  56. 

Stimson,  reference  to,  134,  179, 
220. 

Stock  company,  directions  for 
study  of,  122. 

Stubbs,  reference  to,  112. 

Suffrage  in  England  and  the  U. 
S.,  183,  184. 

Surveying  of  victuals,  76. 

Survivals  of  former  methods  of 
industry  into  the  Factory  Pe- 
riod, 174. 

Tables,  illusti-ating  report  of 
F.  R.  Chandler,  235;  showing 
ownership  of  factors  of  produc- 
tion, 240 ;  sharing  the  products, 
243;  production  and  distribu- 
tion, 259;  yearly  cotton  prod- 
uct of  the  U.  S.,  279;  pig 
iron  production  of  the  U.  S., 
280;  freight  rates  on  wheat, 
by  lake,  canal,  and  rail  from 
Chicago  to  New  York,  280; 
prices  of  pig  iron,  rolled  bar 
iron,  iron  and  steel  rails,  per 
ton,  and  of  cut  nails  per  keg 
of  100  lbs.,  281;  world's  prod- 
uct   of    gold    and    silver,    282; 


INDEX 


299 


freight  rates  on  grain  and 
flour;  383;  United  States 
anthracite  coal  statistics,  284; 
prices  of  crude  oil,  285;  com- 
mercial ratio  of  gold  to  silver, 
286;  foreign  trade  of  the 
U.  S.,  287. 

Tariff  question,  reference  to,  265. 

Tariffs,  English  and  American, 
184,  185. 

Taussig,  reference  to  on  produc- 
tion, 45;  on  capital,  62. 

Taxes,  society's  share  of  product, 
225 ;  nature  of,  226 ;  compulsory- 
contributions  for  social  pur- 
poses, 267. 

Taylor,  reference  to,  85,  111;  on 
first  English  railways,  147,  148; 
on  extension  of  suffrage  to  Eng- 
lish wage-workers,  183,  184. 

Three-field  system  of  agriculture, 
51. 

Tools  and  machinery  in  colonies, 
120,  121. 

Tools  distinguished  from  ma- 
chines, 135,  136. 

Towns,  independence  of  in  Gild 
Period,  76,  77 ;  English,  subordi- 
nation of  to  nation  in  Domestic 
Period,  105,  106;  number  of  in 
early  U.  S.,  114. 

Toy n  bee,  on  problem  of  the  work- 
ing man,  104;  on  eighteenth  and 
nineteenth  century  enclosures 
in  England,  154,  155. 

Traders.     See  Transferrers. 

Trade  combination,  relation  of  to 
production  and  distribution, 
260. 

'^rade  unions,  questions  on,  67,  68; 
compared  to  craft  gild,  83,  84; 
growth  of  in  England,  181,  182; 
in  the  U.  S.,  182,  183. 

Transferrers,  as  producers,  31 ;  in 
Home  Period,  59;  in  Gild  Pe- 
riod, 73. 

Transferring,  English  in  Domestic 
Period,  99-102;  various  com- 
panies, 99;  uncertainty  of  for- 
eign markets,  99,  100;  natural 
economy  and  money  economy, 
100,  101;  coinage,  prices,  and 
banks,  101,  102;  colonial,  125, 
126;  modern,  159,  100. 


Transformers,  as  producers,  31; 
differentiation  of,  58;  in  Gild 
Period,  72;  increase  of  in 
country  in  Domestic  Period, 
90,  91. 

Transforming  industries  in  Home 
Period,  57.  58;  method  of  in 
Domestic  Period,  89.  90,  91 ;  in 
the  colonies,  118,  125;  localized 
by  machine  production,  143. 
See  Manufactures. 

Transportation,  in  England  in 
Domestic  Period,  94-99;  the 
ways,  94,  95 ;  the  vehicle,  96,  97 ; 
the  motive  power,  97;  in  the 
colonies,  122-125;  in  England 
previous  to  1830,  147 ;  in  the  U. 
S.  previous  to  1830,  148,  149; 
growth  of  English  railroads  and 
canals,  147,  148;  extension  of 
railroads  in  the  United  States, 
149,150;  significance  of  modern, 
152-154. 

Transporters,  as  producers,  31 ; 
during  Home  Period,  58;  in 
Gild  Period,  73;  class  of  in  Do- 
mestic Period,  98,  99. 

Trust,  directions  for  study  of,  22. 

Tudors,  and  English  towns,  106; 
and  national  ideals,  106,  107. 

Turner,  reference  to,  86,  114. 

Turnpikes,   laws  establishing,  95. 

Two-field  system  of  agriculture, 
51. 

Undertaker,  relation  of  to  produc- 
tion, 26;  in  Home  Period.  62,  63; 
in  Gild  Period,  80,  81 ;  in  Domes- 
tic Period,  110,  111;  in  colo- 
nies, 129,  130;  in  Factory  Period, 
175;  a  kind  of  workman,  229. 

Unearned  increment,  illustration 
of,  233 ;  meaning  of,  233. 

Utility,  defined,  23;  forms  of, 
24,  25;  classification  of,  27- 
29 ;  actual  and  potential  defined, 
28;  relation  of  to  commodity 
and  good,  28,  29;  kinds  of,  19:5; 
illustration  of,  193;  marginal, 
194;  (juantity  of,  193;  al)S()luto 
and  ettective.  194;  di.stingnislied 
from  value,  197;  compari.son  of, 
196;  general  discussion  of,  191- 
216;  variations  in  kind  and 
quantity  of,  220;  abundance  of 


300 


INDEX 


coupled  with  poor  living,  245. 
See  Value. 

Valuation,  causes  of  individual 
and  social,  211. 

Value,  distinguished  from  utility, 
197;  general  discussion  of,  191- 
216;  formula  for,  197.  See 
Utility. 

Vessels,  tonnage  of,  in  England, 
1840-1890,  151;  in  the  U.  S.  in 
1896, 151.  See  Ships  and  Trans- 
portation. 

Villein,  52-55.     See  Manor. 

Vincent,  on  trend  of  migration, 
86,  87 ;  reference  to,  86. 

Vinogradoff ,  reference  to,  52. 

Virgate,  52-55.     See  Manor. 

Wages,  wage-workers'  share  of 
product,  225 ;  discussion  of,  230 ; 
relation  of  to  population,  257; 
and  conditions  of  labor,  modern, 
178,  179. 

Wages  system,  rise  of  in  England, 
111,  112. 

Wage-worker,  in  Home  Period, 
63,  64;  in  Gild  Period,  81,  82,  83; 
in  England,  in  Domestic  Period, 
111,  112;  relations  of  to  employ- 
ers previous  to  Factory  Period, 
111,  112;  in  colonies,  130;  rela- 
tion of  to  tools,  material,  motive 
power,  work  place,  and  em- 
ployer, in  Home  Period,  Gild 
Period,  Domestic  Period,  and 
Factory  Period,  171,  172;  in- 
crease of  during  the  Factory 
Period,  175,  176;  personal  free- 
dom of,  176,  177;  homes  of, 
177,  178;  combinations  of  in 
England,  181,  182;  in  the  U.  S., 

182,  183;      political    status    of, 

183,  184. 


Walker,  reference  to,  191. 

Waltham,  first  complete  cotton 
factory  of  U.  S.  in,  145. 

Wants,  equalization  of,  195 ;  satis- 
faction of,  196. 

Warner,  on  number  of  men  out 
of  work,  162.  168;  on  administra- 
tion of  charity  in  the  U.  S.,  165; 
on  signs  of  promise,  165,  166. 

Wat  Tyler's  Rebellion,  70. 

Wealth,  defined,  31  ;  ratio  of 
l^roducers  of  to  producers  of 
services,  161. 

Webb  and  Webb,  reference  to, 
67,  83;  on  number  of  English 
trade  unionists  in  1892,  181,  182; 
definition  of  trade  union,  261; 
on  relation  of  trade  union  to 
craft  gild,  262 ;  on  educational 
value  of  trade  union,  263. 

Weeden,  references  to,  85,  118, 
120,  122,  125,  126,  128,  129,  130. 
131 ;  on  travel  in  the  colonies, 
123;  on  the  "Yankee  coasting 
skipper,"  123,  124. 

William  I,  49,  50 ;  as  lord  of  man- 
ors, 53. 

Worsted  manufacture,  location  of 
in  Domestic  Pex'iod,  91. 

Wriglit,  on  lumber  exports  fi-om 
America  in  1792,  117;  on  value 
of  colonial  manufacture,  120; 
on  introduction  of  cotton  ma- 
chinery into  the  U.  S. ,  144 ;  on 
first  complete  factory  in  U.  S., 
145;  reference  to  for  compari- 
son of  Factory  Sy.stem  with  Do- 
mestic System,  177;  reference 
to,  85,  117,  118,  120,  137,  179. 

Young,  on  Englisli  roads  in  eight- 
eenth centuiy,  95. 


V, 


/^ 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 

Los  Angeles 
This  book  is  DUE  on  the  last  date  stamped  below. 


DEC  5      l^^" 
APR  3     1961 


i 


Form  L9-25m-9,'47(A5618)444 


THE  LIBRARY 

BJWVERSITY  C^  CAf JF01«qft 

LOS  ANGEi.::^ 


^,J,  /i^4^/-^J^  f<:)1/ ^^' ^'^^^ '^  ^n-i^c^ (Ua<f^..AJU^ 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


AA    000  557  579    0 


t 


PLEA*^-!   DO    NOT    REMOVE 
THIS    BOOK  CARD 


3  1 


■^ 


University  Research  Library 


H 


m0 


